Reserve Deposit

Solid requires programs to make a Reserve deposit to cover any fraudulent transactions on your platform's side, where Solid would lose funds, and/or for non-payment of invoices. Essentially, it's a security deposit that still belongs to your organization, but Solid can use it if there is clear and legal recourse to make Solid whole in certain events where Solid is out funds that are legally due to us due to something caused by our clients.

Regarding the balance sheet classification of this payment, you should record it as an asset. You can either use "restricted cash" or "deposits" because, even though we are holding those funds, you are the owner until and unless Solid needs to draw from those funds to cover the shortfall. The Reserve funds will be returned to you when the contract term is complete.

Was this article helpful?
0 out of 0 found this helpful