What is a 'Trust Receipt'

A trust receipt is a notice of the release merchandise to a buyer from a bank, with the bank retaining the ownership title to the released assets. In an arrangement involving a trust receipt, the bank remains the owner of the merchandise, but the buyer is allowed to hold the merchandise in trust for the bank, for manufacturing or sales purposes.

BREAKING DOWN 'Trust Receipt'

The buyer of merchandise subject to a trust receipt is required to maintain the merchandise, and any proceeds' of the sale of the merchandise, for remittance to the bank. In this way, the buyer is permitted use of the merchandise for their business activities, but the bank's interest in the ownership of the merchandise is protected.

RELATED TERMS
  1. Gross Merchandise Value

    The total value of merchandise sold over a given period of time ...
  2. Merchandising

    Merchandising is any act of promoting goods or services for retail ...
  3. Trust Deed

    1. A formal document which outlines the terms of a trust agreement. ...
  4. Mass Merchandising

    A method of selling insurance policies in which an employer or ...
  5. On Account

    An accounting term that denotes partial payment of an amount ...
  6. Receipt

    A written acknowledgment that something of value has been transferred ...
Related Articles
  1. Retirement

    How To Set Up A Trust Fund In Australia

    No, they're not just for the super-rich. But you need to know the rules.
  2. Financial Advisor

    Should You Put Your Faith In A Trust?

    Many institutions want a piece of your portfolio, but trusts can provide a one-stop shop.
  3. Taxes

    Which Receipts Save Big Money at Tax Time

    Don't wait to April 13th to set up a smart receipt-filing system. These 7 categories could save you some significant money.
  4. Investing

    Analyzing Retail Stocks

    To analyze retail stocks, investors need to be aware of the most common metrics used. Find out what they are.
  5. Investing

    Unit Investment Trusts Market: 3 Trends in 2016

    Learn more about unit investment trusts (UITs), and discover some of the most common trends in the UIT market to date in the year 2016.
  6. Managing Wealth

    Surprising Ways a Trust Could Help Your Family

    Everything you always wanted to know about setting up trusts, in handy glossary form.
  7. Retirement

    How To Set Up A Trust Fund In The U.K.

    A guide to the whys and wherefores of setting up this most versatile of estate-planning instruments in the United Kingdom.
  8. Investing

    Establishing A Revocable Living Trust

    This arrangement allows you to have more control over your estate - both before and after your death.
  9. Insights

    Star Wars Toys: Is The Tail Wagging The Dog?

    With $700 million in Star Wars toys sold in less than a month. Has the success of the merchandise become the proverbial "tail that wags the dog?"
  10. Investing

    eBay Has a New Plan to Eliminate Counterfeits

    Even though it's just a middleman, eBay (NASDAQ: EBAY) gets hurt every time someone sells counterfeit merchandise on its platform. While the auction/retail site only provides the tools that ...
RELATED FAQS
  1. What are the differences between income statements from merchandising companies vs. ...

    Learn how merchandising companies and service companies have to account for different information when preparing an income ... Read Answer >>
Hot Definitions
  1. Ex-Dividend

    A classification of trading shares when a declared dividend belongs to the seller rather than the buyer. A stock will be ...
  2. Debt Security

    Any debt instrument that can be bought or sold between two parties and has basic terms defined, such as notional amount (amount ...
  3. Taxable Income

    Taxable income is described as gross income or adjusted gross income minus any deductions, exemptions or other adjustments ...
  4. Chartered Financial Analyst - CFA

    A professional designation given by the CFA Institute (formerly AIMR) that measures the competence and integrity of financial ...
  5. Initial Coin Offering (ICO)

    An Initial Coin Offering (ICO) is an unregulated means by which funds are raised for a new cryptocurrency venture.
  6. The Bernie Madoff Story

    Bernie Madoff ran a multibillion-dollar Ponzi scheme that is considered the largest financial fraud of all time.
Trading Center