Can we write off open credit memos and unapplieds on account cash payments,
particularly from customers we no longer do business with or company that
have gone out of business?
Answer: Every state requires
businesses and financial institutions to report when property has been abandoned
or unclaimed after a specified period of time. The meaning of escheatment
has been expanded to include property of every kind. The definition of unclaimed
property involves hundreds of categories of property. If a person or entity
has a legal or equitable right to the property, then a state's unclaimed
property law governs it. Before a creditor company can consider on account
cash or credit memos to be abandoned and escheatable, the company must try
to locate the owner. If a company is unable to find the rightful owner, it
must report the account to the State within the time prescribed by law. The
State then claims the abandoned property through a process called escheatment.
Please read the article below for additional information.