Research On Asset Securitization Accounting Problems

Asset securitization is a financial product which has the fastest development and the most vigor in the modern international capital market. It can get the money and change the structure of assets and liabilities by structuring ingeniously a transaction, and transferring the illiquid assets to liquid and marketable securities.From the development of securitization aboard, the desired alternative in most securitization transactions is to structure the transaction that will result in off-balance sheet treatment for existing assets. To structure a successful securitization, the sponsor should design out more complicated contracts to scatter the risks and interests on expected cash flow of the underlying assets and transfer the asset to a SPE to isolate the risk of transferred assets from other assets. In this process, if the transfer is accounted for as a sale and the SPE is unconsolidated by the sponsor, the sponsor can get the off-balance sheet treatment. So the recognition of transferred asset and consolidation of SPE is main problems on securitization accounting which have attracted the attention of sponsors and accounting standard-setters. This paper was focus on the two problems. With an introduction and analysis of the international accounting rules about it, the paper came to a conclusion that the international accounting principles and procedures should be used to establish the ruler in...