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. General Order - GO

    A status given to imported goods that are missing the proper ...
  4. Trust Deed

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

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

    An accounting term that denotes partial payment of an amount ...
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. 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.
  4. 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.
  5. Investing

    Analyzing Retail Stocks

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

    Irrevocable Trusts: New Trends You Need to Know

    Several improvements and additional provisions have been added to irrevocable trusts in recent years making them considerably more versatile than before.
  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

    A Look Into Creating a Trust Fund With ETFs (VCIT, SDIV)

    Learn the basics of how a trust works and the two most common types. Discover how to use ETFs to fund a trust and the different strategies.
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 >>
  2. What is the difference between revocable and irrevocable intervivos trusts?

    Learn what an inter-vivos trust is, the difference between an irrevocable and a revocable inter-vivos trust, and why it is ... Read Answer >>
Hot Definitions
  1. Protectionism

    Government actions and policies that restrict or restrain international trade, often done with the intent of protecting local ...
  2. Fiduciary

    A fiduciary is a person who acts on behalf of another person, or persons to manage assets.
  3. Demonetization

    Demonetization is the act of stripping a currency unit of its status as legal tender and is necessary whenever there is a ...
  4. Investment

    An asset or item that is purchased with the hope that it will generate income or appreciate in the future. In an economic ...
  5. Redlining

    The unethical practice whereby financial institutions make it extremely difficult or impossible for residents of poor inner-city ...
  6. Nonfarm Payroll

    A statistic researched, recorded and reported by the U.S. Bureau of Labor Statistics intended to represent the total number ...
Trading Center