Quarterly Q&A – Winter 2018

Q: Who gets the accounts receivable and the accounts payable on the day of closing?

A: In an asset purchase transaction, the seller generally gets the accounts receivable since they are handing the business over free and clear of all liens and encumbrances unless other arrangements have been made. In stock and asset transactions, when the accounts receivables are being purchased, there is generally a small range that the accounts receivable must fall in and it is adjusted plus/minus if it does not fall within the pre-determined range. This is also the case with the accounts payable if they are being purchased.