The Research On Transaction Structure And Accounting Treatment Of Asset Securitization

The experiment of asset securitization in Chinese enterprises wascommenced in2005. Due to the principle of "pilot first, legislationsecond" followed by government authorities, there are still manyunsettled issues of Chinese enterprises’ asset securitization, both in termsof the building of legislative system and the business practice. Amongthem, the most important ones are the imperfection of legislations and theequivocation of accounting treatments, which seriously impeded thedevelopment of the pilot of asset securitization in China’s enterprises.This article is designed to analyze the transaction structure andaccounting treatment of Chinese enterprises’ asset securitization byresearching on the basic theory and the course of development andinnovation in the pilot of asset securitization in China’s enterprises.Combined with China’s national conditions and the successful experiencefrom abroad, the article will give a number of useful policyrecommendations and reform measures for healthy and continuous development of Chinese enterprises’ asset securitization.The conclusions of this paper are as follows. First, a specialized andunified legal system should be established so as to improve thebankruptcy isolation mechanism of SPV and to achieve true sales ofunderlying assets. Second, the degree to which risk and return istransferred should be quantitatively described. Meanwhile relevantChinese Accounting Standard should be revised so as to developreasonable and sound accounting treatments for asset securitization. Third,the range of underlying assets (e.g. asset partition) should be expanded soas to meet the needs of different investors in the market.This article is divided into six chapters. Used the way of qualitativeand quantitative analysis combined with case-study method researchingon the existing issues related to asset securitization, the article hasimportant theoretical and practical significance for the development ofChinese enterprises’ asset securitization.