USA Unclaimed Property T/to State

[auditor2015]

Hi All,
I have a question regarding treatment of moving the unclaimed checks in terms of a JE:
When wages are paid:
Wages Payable ac DR
To Bank CR
Suppose a check is unclaimed and I need to remit to the State.
So I void the issued unclaimed check. The JE will be
Bank Ac DR
To Wages Payable
Now I remit the money to the state


What JE should I do? Before remittance can I show it as unclaimed property in the LIABILITIES per FASB? and after remittance do I need a Footnote Disclosure in the FS?

 

[kirby]

Hi
No need for all that FASB and disclosure stuff.
After your last entry above, DR Wages Payable and CR Liability for escheatment to state (or something similar).
Then fill out the state reporting forms and pay to state before state deadlines.
Yes this new acct is a liability account. No, typically needs no footnote disclosure.

 

[auditor2015]

Thanks Kirby,
So I have a Liability on my books for Escheated checks. When I remit funds will it clear? Escheated checks DR Bank ac CR.?

 

[kirby]

Yup! You've got it right!

 

[sch44792]

Hi All,
I have a question regarding treatment of moving the unclaimed checks in terms of a JE:
When wages are paid:
Wages Payable ac DR
To Bank CR
Suppose a check is unclaimed and I need to remit to the State.
So I void the issued unclaimed check. The JE will be
Bank Ac DR
To Wages Payable
Now I remit the money to the state


What JE should I do? Before remittance can I show it as unclaimed property in the LIABILITIES per FASB? and after remittance do I need a goku.tu Footnote Disclosure in the FS?

Unclaimed Property Liability DR
To Bank CR

You can absolutely classify the unclaimed wages as a liability per FASB guidelines, under "Unclaimed Property Liability" or something similar until you remit it to the state.

As for the Footnote Disclosure, it really depends on the materiality of the amount. If it's a significant sum, you might want to disclose it for transparency. Hope this helps!