Research On The Accounting Treatment Of Assets Securitization

For Asset securitization has the advantages of increasing cash liquidity, spreading the investment risks and lowering the cost of financing, it has developed great around the world since its emergence from USA in the late of 1960s. China began to pilot assets securitization in the year of 2005, and it still in the infancy and exploration phase. In our country, Asset Securitization Accounting is also at the initial stage of exploration,which has a major impact on the development of asset securitization. The construction of relevant laws and regulations is not perfect. Although the Ministry of Finance has introduced the"pilot securitization of credit assets accounting", Accounting Standards No.23"financial assets confers"and other relevant laws and regulations, there are some questions need to discuss in specific terms. On the basis of comparative analysis of international accounting standards, China and the United States Financial Accounting Standards regulations related to the accounting treatment of asset securitization, this paper summed up our accounting treatment of asset securitization. Asset securitization sponsors as the core of entire business, its accounting treatment is also most important. So we made the accounting treatment of sponsors as our main study object.The paper includes six parts.Firstly, this paper discuss the meaning and fundamental principles of asset securitization and introduces the basic theories about it in brief.The chapter from three to the fifth discusses the accounting treatment of asset securitization, such as accounting recognition, measurement, consolidated financial statements required in asset securitization and disclosure and upon these some related recommendations are proposed while considering the status quo in our country. The accounting recognition used in asset securitization includes: Risk and Reward Approach, Financial Component Approach, Continuing Involvement Approach. The first method decides whether to derecognize the transferred financial asset according to whether the substantial risks and rewards of the asset have been transferred. The second method decides whether to derecognize the transferred financial asset according to whether the control of the asset has been abandoned. The third method assumes the transferred asset can be divided into units, and then decides whether each unit meets the derecognization conditions. This paper not only introduces accounting recognition in detail, but also evaluates each approach and shows the advantages and disadvantages. Accounting measurement directly influences information disclosure. This paper mainly discusses the accounting measurement under financial component approach and continuing involvement approach and then analyses the status quo of accounting measurement in China. As for SPE consolidation, it still requires more research. The paper introduces those regulations of consolidation of America and then analyses the status quo of our country. The same aspects are discussed in information disclosure of asset securitization.In part six, the paper forecast the development of China's asset securitization and the accounting treatment of asset securitization. The development of long-term credit asset securitization, the mortgage loan securitization, non-performing loan of commercial banks securitization, and business asset securitization will be the four main aspects.Main points: I) Continuing Involvement Approach is the best method to accounting recognition in asset securitization. II) The asset securitization accounting is different from the traditional accounting. III) Fair value is the best measuring properties for asset securitization accounting. IV) Make special purpose trust as the SPE is reasonable for China's asset securitization.The innovation: I) The paper compared the"pilot securitization of credit assets accounting"with the Accounting Standards No.23"financial assets confers". II) The paper analyzes the situation of China's asset securitization in details. III) This paper not only conducts an in-depth theoretical study but also uses a lot of typical cases. Generally, the paper is on the basis of proposing stage of the asset securitization field our country at present, through the comparative research to FAS and IAS, and try to probe into the feasible accounting regulation way. The author hopes to offer some useful information for our asset securitization.