The debtor offers equipment instead of part of the settlement money

The offer contains an asset and some cash

Suppose a customer owes a business $36,000 and offers $12,000 plus a used machine said to be worth another $12,000. The owner is interested because the business could use the equipment. Before agreeing, establish what the offer really provides. The customer's valuation and possession of the machine do not answer every ownership, condition or transfer question.

Clarify the disputed account and your priorities

business.gov.au's dispute guidance recommends checking facts and deciding the result you want. Reconcile the debt and explain whether your priority is cash, useful equipment or a final resolution. A machine that is attractive in principle may still leave the business short of money needed for wages or suppliers. Consider the settlement in the context of those obligations.

Source: business.gov.au: Prevent, manage and resolve disputes

Identify exactly what is offered

Obtain the make, model, serial number, location, condition and proposed transfer details. Ask for ownership and finance information and have the relevant rights checked professionally. Do not assume an informal handover transfers clear ownership. In the hypothetical example, an inspection may also reveal that installation or repair is required before the business can use the machine.

Test the value to your business

Seek an appropriate independent assessment of condition and value where warranted. Include transport, installation, insurance and expected repair costs in the commercial comparison. If you would not otherwise buy the equipment, explain why accepting it helps. Avoid treating the customer's original purchase price as current recoverable value or assuming the machine can be sold immediately for the stated amount.

Have the proposed exchange documented

Ask a lawyer to review the settlement terms, asset transfer, payment timing and what happens if the promised transfer cannot occur. Raise any concern about the debtor's financial position. Do not collect the equipment or release the account before understanding the arrangement. The legal and accounting treatment should be assessed alongside the commercial value, rather than after the asset arrives.

Compare the complete outcome

Put the net cash, assessed equipment value, associated costs and remaining uncertainties beside the alternatives. Record the reasons for accepting or rejecting the proposal. CRP can help organise that comparison. The relevant question is what the business would actually receive under a properly assessed arrangement, not whether the debtor's combined headline figures appear to equal an acceptable discount.