Accounts receivable are property rights recorded on a company's balance sheet: this is what the asset is called in accounting terms, while legally it is a contractual claim. A simple example: a water utility supplies its service throughout the month, and customers pay within twenty days after the reporting month ends. Until payment is made, receivables sit on the utility's balance sheet — an asset in accounting terms, and legally a right to collect payment for a service already delivered. Independent valuation of accounts receivable establishes the market value of such claims — for a sale, collateral, financial reporting or litigation.
Receivables and claims we value
- receivables under supply agreements — goods shipped, payment outstanding;
- receivables for completed works and services;
- prepayments where delivery has not taken place;
- current, overdue, doubtful and distressed receivables;
- single claims and portfolios covering hundreds of counterparties.
An important boundary: this page covers claims arising from commercial contracts. Claims under loan agreements are a separate valuation object with its own methodology — see the dedicated page.
When receivables valuation is required
- sale or assignment of claims;
- offsetting of receivables and payables between counterparties;
- pledge of claims to raise financing;
- financial reporting and revaluation under IFRS;
- litigation over collection and asset distribution;
- contribution of claims to charter capital;
- liquidation or reorganisation of the creditor company.
Book value under accounting standards and independent market valuation are not the same
In financial statements, receivables are carried at historical or net realisable value adjusted for the allowance for doubtful debts — an accounting mechanism driven by formal coefficients under Ukrainian accounting standards. Independent valuation answers a different question: what is this claim worth on the market today. The appraiser analyses the debtor's financial condition and solvency, the age and history of the debt, available security and contractual penalties, the limitation period and the legal quality of the documents — and determines the value at which the claim can realistically be sold or assigned.
Valuation approaches for accounts receivable
The income approach is primary: expected recoveries under the claim are adjusted for collection probability and timing, then discounted to present value. Where comparable debt trades on the market, the market approach applies, using prices of actual assignment transactions. A mandatory part of the engagement is the legal quality review: the underlying contract, delivery documents, reconciliation statements and payment records. The market value of overdue receivables may be a fraction of face value, and for distressed receivables it may approach zero — a substantiated conclusion to that effect is also a fully valid valuation result.
Our track record
Receivables appear on the balance sheet of every operating company, so we have valued them as part of asset bases in every business and corporate rights valuation we have performed — from machine building and metallurgy to agribusiness. A distinct body of work is the revaluation of assets of insolvent banks for the Deposit Guarantee Fund of Ukraine in 2015–2020, where claims under receivables were the direct valuation object. We also handle individual engagements — valuing contractual claims between counterparties for a sale, offsetting or court proceedings.
Documents required
- contracts under which the receivables arose;
- delivery documents, invoices and payment records;
- reconciliation statements with debtors;
- the debtor's financial statements (where available);
- client identification documents.
The exact list depends on the composition of the receivables and the purpose of valuation and is agreed at a free preliminary consultation.
Questions and answers
Are payables valued as well? Yes — typically alongside receivables: in offsetting arrangements between counterparties and within business or enterprise valuations, where both sides of the balance sheet are analysed.
Can overdue or distressed receivables be valued? Yes. The market value of overdue debt reflects collection probability and may amount to a fraction of face value — precisely the conclusion needed for a debt sale, write-off or litigation.
How do receivables differ from claims under loans? The legal nature is the same — a claim; the difference lies in the origin: receivables arise from commercial contracts (supply, services), while loan claims arise from credit agreements, with different risks, security structures and analytical methodology.
Our team, including appraisers holding international valuation certificates, has valued claims for over 20 years — from a single contract debt to bank portfolios. Every engagement receives an individual approach: we are attentive to the client's situation, meet agreed deadlines and support the report until its purpose is achieved. Contact us by email or messenger to discuss your case and receive a quotation.
