The time period between when a deposit is made and when the funds become available in an account, specifically relating to check deposits. The availability float exists because banks have to process physical checks before releasing funds, meaning that the depositor has to wait before funds appears in a bank account. Companies can reduce an availability float by moving to an electronic payment system, as this reduces the reliance on a bank's processing speed on physical checks.
The difference between the availability float and a payment float is referred to as the net float.
For example, a printing company has $50,000 deposited in a bank and is owed $10,000 by one of its clients. The printing company cashes the $10,000 check and adjusts its ledgers to indicate that it has $60,000. Until the deposit is complete, the printing company's bank account will still show it has $50,000 available. The $10,000 is the availability float.
Investment dictionary. Academic. 2012.
Look at other dictionaries:
Availability float — Checks deposited by a company that have not yet been cleared. The New York Times Financial Glossary … Financial and business terms
availability float — checks deposited by a company that have not yet been cleared. Bloomberg Financial Dictionary … Financial and business terms
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availability float — Fin money that is available to a company because checks that it has written have not yet been charged against its accounts … The ultimate business dictionary
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