Accounting Research On Asset Securitization In China

Under the background of current economic transformation in China, as a financial innovation tool which can activate the stock of assets and improve the efficiency of resource allocation, Asset securitization plays an important role in solving non-performing assets for financial institutions, and expanding the financing channels for corporate entities. The pilot of asset securitization in China was set up in 2005, and after years of development, the securitization business runs steady. At the same time, as a financing tool, the product design of asset securitization is relatively complex, with many parties involved, so how to develop standardized accounting standards is important for information disclosure as well as risk management and control.This dissertation use normative analysis to study the accounting treatment of sponsor in asset securitization business, mainly involves three major issues: the derecognition of underlying asset, accounting measurement, and reporting requirements of SPE. This dissertation mainly involves four aspects. First, this dissertation describes the background and significance of asset securitization accounting research, and discusses the research results of this issue at home and abroad. Second, this dissertation summarizes the domestic and international relevant accounting theories, treatment methods and development process of the guidelines, presents the improvement ideas of derecognition of financial assets, describes the measurement methods under different derecognition principle, and analyzes the SPE merger specification path under the evolution of the concept of control. Third, this dissertation analyzes the accounting treatment of asset securitization business and the existing problems in the practical application of China’s current accounting standards. For the derecognition issues on financial asset transfer, starting from the decision-making process, this dissertation analyzes the sponsor’s accounting choices in practice from the aspects of both credit asset securitization and enterprise asset securitization. This dissertation points out that the judgment of risk return transfer lack of binding, and control are not consistent with the substance of the securitization business whether from the content or the role, in addition, the quality of accounting information is further affected because of the intervention of regulatory authorities. For the special purpose entity consolidation issue, this dissertation focuses on the practicality of the common enterprise merge model used in special purpose entities, and analyzes its difficulty in practical operation. Finally, to the main problems of the accounting treatment, the dissertation makes suggestions on improving the relevant accounting standards of asset securitization in China.The main innovation of this dissertation includes: First, in terms of derecognition on financial assets transfer, this dissertation discusses the advantages and disadvantages of each derecognition principles from the theoretical and practical aspects, and by analyzing the attempt to improve the relevant standards of FASB and IASB, and the application in China, this dissertation proposes a new method which based on control and combined with the judgement of risk return transfer. Second, in terms of SPE consolidation, starting from the change of control concept, this dissertation reveals how substantive control is embodied in the judgment of the special purpose entity. Then on the basis of the application guidelines, and drawing on the foreign standards, This dissertation try to put forward the "main responsible person" test procedure, in order to improve the operability of the combination standard.The main limitation of this dissertation includes: First, this dissertation mainly takes large commercial banks and listing corporation as the research object, so may not be able to fully grasp the application of asset securitization related accounting treatment in China. Second, As the author is relatively weak in financial and legal knowledge, this dissertation does not analysis how complex financial instruments and legal agreement affect the accounting treatment of sponsor deeply.