Escheatment is the process of remitting an asset to the state of the address of record as unclaimed property.
When not correctly managed and reported, the historic unclaimed property liability coupled with the risk of state audits – and subsequent fines and penalties for non-compliance – become material to your annual reviews, findings, and ultimate opinions. And, given the economic situation in many states, unclaimed property accounting audits are occurring more frequently than ever before. It is imperative, now more than ever, to conduct proper escheatment, the process of remitting an asset to the state of the address of record as unclaimed property.
The responsibility for unclaimed property compliance and escheatment within an organization generally falls to the tax department – even though unclaimed property is not a tax. Because of this, the details necessary for accurate and timely compliance and escheatment are not always provided to the tax department by the accounting or financial side of the organization, and as a result, full and accurate compliance may not always be attained. CPAs, however, can assist management in understanding the pitfalls that can arise if compliance regulations are not met. A CPA can recommend policies and processes for your company to create, implement, and monitor by internal audit to ensure communication and facilitate timely and accurate compliance and escheatment.
In her article, “Accounting for Unclaimed Property,” published in February’s edition of The CPA Journal, Sonia Walwyn outlines CPA best practices for conquering unclaimed property. Check out the article here to learn what recommendations she has for CPAs and how they can help management become more compliant with the laws in an effort to avoid overstatement of an organization’s financials.
Go back to the Keane Unclaimed Property Corporate HOMEPAGE