The statement of realization and liquidation differs from the statement of affairs in the following respects:
1. The statement of realization and liquidation reports the actual liquidation results. In contrast, the statement of affairs is of a pro forma nature and is based on estimated rather than actual results.
1. The statement of realization and liquidation reports the actual liquidation results. In contrast, the statement of affairs is of a pro forma nature and is based on estimated rather than actual results.
2. The statement of realization and liquidation provides an ongoing reporting of the trustee’s activities and is updated throughout the liquidation process. The statement of affairs is a summary of the estimated results of a completed liquidation.
Generally speaking, a court will require the trustee to provide an accounting regarding the following items pertaining to the insolvent company:
1. Unrealized assets assigned to the trustee including those subsequently discovered.
2. Assets that have been realized or liquidated.
3. Liabilities to be liquidated that have been assigned to the trustee.
4. Liabilities that have been liquidated.
Historically, the preceding information was presented in a report called the realization and liquidation account, which employed a rather cumbersome format. Currently, this information is most often presented in a worksheet format that identifies critical balances and relevant cash receipts and disbursements.