Credit Risk Mitigation Accounting Research

Credit risk mitigation is a tool for separating, transferring, hedging and managing credit risk. Reasonable promoting innovation of credit derivative product and market will effectively allocate credit risk and improve the market risk-sharing mechanism. It helps improving the efficiency of financial markets, and promoting healthy and harmonious development of the multi-layered financial market. At the same time, it provides a new way to alleviate the difficult problem of financing of SMEs. Exploring the accounting treatment of credit risk mitigation in China actively promote the development of credit derivatives and financial markets. This article is intended to design a set of accounting treatment for credit risk mitigation to form a common industry accounting model, and then play an active role in the development and perfection of the Accounting Standards for Enterprises in China.This paper includes seven sections:The first part is an introduction of the background and significance of this study, reviewed the literature and clarify the research methods and ideas; the second part introduces the credit risk mitigation products in the international market; the third part tells the accounting treatment of credit default swaps; the fourth part introduces credit risk mitigation in our current situation, problems encountered and prospects; the fifth part is the main part of this article which researches on the system design of the accounting treatment of credit risk mitigation; the sixth part is the case studies and difficulties; Part VII, conclusion.