Items in Process of Collection (IPC)
Items in Process of Collection (IPC) Definition: Items in Process of Collection (IPC) is a bank balance sheet asset representing checks or electronic items that have been deposited by customers but have not yet been finally settled by the paying bank. In plain English, IPC is the “financial limbo” between the moment a customer deposits funds and the moment the bank actually receives them. How IPC Works When you deposit a $10,000 check, your bank typically credits your account immediately. However, the bank has not yet received cash from the other institution. Until settlement occurs, the deposit sits in IPC. Two related accounting concepts help explain this timing difference: Gross IPC: Total dollar amount of all uncollected items currently in transit. Deferred Credit Items: The liability representing provisional credit given to customers. The difference between the two is known as Net Float : Net Float = Gross IPC – Deferred Credit Items This “float” reflect...