Accounting For Assets Securitization

Assets securitization has a great development since its emergence from USA in the 1970s. The reason is that this kind of financial innovation has so many advantages such as decentralizing credit risk, disposing bad debts, solving the problems in financial innovation, reducing financing cost and improving capital structure. It has become an important accounting project because of special accounting methods and other multiple problems related to financial instruments.During the researching process of accounting for assets securitization, this thesis introduces researching course and status quo, expatiating accounting problems unfathomed of different organizations, confirming both accounting methods and judgment standards, at the same time, some disclosure items also involved in. This thesis also proposes some suggestions on the analysis of international accounting standard. The first is the qualification of special purpose entity should be decided upon the controlling rights of transfer assets. The second is transfer assets should be treated as true sale with financial component approach. The third is consolidation decision should consider such factors as result of accounting recognition, qualification of SPE and controlling rights of retained benefits for originator. The last is accounting measurement should adopt fair value attribute.The author also puts forward a project on assets securitization to assets of commercial bank in China. In this project, the author brings forward a pricing model based on the five-classed debts system and credit rank. In such model, the variables and restrictions are interpreted also. Accounting designation is completely true sale settlement, non-consolidation of originator and SPE, and measurement standard is comprised as "fair value" on negotiated price.