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liquidation

1. The act of reducing assets to cash and distributing cash accordingly, especially of a business that is being wound up .
2. The act of determining the cash value of some debt or damage . The parties involved essentially reduce their legal conflict or outstanding debts to a dollar amount. Debts and damages can be liquidated in various ways: By an agreement before any dispute arises, by an agreement after a dispute arises, or by litigation .
3. When importing merchandise, the U.S. Customs Service will collect or refund duties to adjust estimated duties for actual duties required for entry of merchandise in a process called liquidation.

[Last reviewed in June of 2023 by the Wex Definitions Team
]

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