Asset-backed Securitisation Financing And Its Accounting Issues

In recent years, asset-backed securitisation(ABS) has been a hot issue in financing area of China. It was originated and developed in the U.S., and widely accepted in many other countries. With the evolvement of innovation technology for financial instrument, ABS is commonly integrated with derivative financial instrument, so the transaction structure has become more complicated. Now, ABS is one of the indicators to assess the development extent of a financial market.What is ABS, how can it help the domestic enterprises improve their financial environment, are we already in a mature state to initiate such financial form in China? Systematic research on such problems is rare, most of the relevant essays are fragmentary and introductory.This dissertation attempts to give a more inclusive exploration on the features and operating modes of ABS. In considering of the internal environment, it discusses the necessity and feasibility of launching ABS in domestic area. Legal environment is a major factor to determine whether ABS financing could achieve expected financial goal. While accounting is a business language, to analysis ABS in accounting perspective will do good to determine the substance of an ABS transaction. So this article focuses on the legal environment and relevant accounting treatment issues of ABS.