Recourse

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Recourse in accounting refers to the legal right of a lender to claim the borrower’s assets or seek repayment from the borrower if the borrower defaults on a loan. This term is often used in the context of factoring or securitization agreements. Understanding “what is recourse in accounting” is crucial for assessing the risk associated with financial transactions. Recourse impacts the liability and risk profile of both lenders and borrowers.

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