Achieving IFRS Off-Balance-Sheet Treatment in Trade Receivables Securitizations
Abstract Changes in accounting requirements made in response to the financial crisis of 2007-2008 have made achieving off-balance-sheet treatment for trade receivables securitizations more challenging, particularly under IFRS. Fortunately, a cost-efficient solution has emerged and is proving practical and efficient. Despite the need to transfer ...
Auditors up the balance sheet scrutiny
Companies are receiving greater scrutiny from auditors over IFRS balance sheet accounting treatment of new and existing factoring facilities. It is not that the accounting rules have changed, but assessment and enforcement have become more deliberate. ...
Trade Receivables Securitisations
Securitisation of various cash flow assets began in the 1980s. Trade receivables, while not the fi rst asset class to be securitised, date back at least 25 years. Trade receivables securitisations allow companies to raise capital by selling, on a revolving basis, a selection of receivables to a legally separate, bankruptcy-remote special purpose en ...
Working Capital – a Strategic Opportunity?
As any keen MBA student will relate, Michael Porter’s Five Forces* model can help management to determine the structure of their industry and provide a backdrop for strategy formulation. Understanding the structure of an industry is an important starting point for management in deciding whether to achieve competitive advantage via (i) differen ...
Introduction to Receivable Securitization
While portfolio factoring and receivable securitization are both corporate funding constructs based on the true sale of a company’s trade accounts receivable, there are also significant differences between the two products. Unfortunately, many receivable finance practitioners have only a vague idea on how the other’s product actually works. Th ...
Securitisation of Trade Receivables: An Alternative Source of Corporate Liquidity
Securitisation is a powerful technique for deriving flexible and efficient liquidity from a corporation’s trade accounts receivables. It can provide committed, revolving funding on a non recourse basis at a low ‘all-in’ cost, with the possibility for accounting sale treatment, term placement, or other useful features. Once the providence of l ...
Sharing the Business
As an arranger, structurer, administrator and reporting agent on trade receivables securitisations and other structured receivables finance products, we have been viewing the evolving trends and developments in this area of the market with particular interest. ...
Accounts Receivable Securitization
By various estimates, a tally of accounts receivable as reflected in the financial statements of U.S. companies would total approximately $10 trillion, with a comparable amount outstanding in Europe and more in the rest of the world. In order to bridge the typical timing gap of cash inflows and outflows, companies frequently seek funding from lende ...
Making Trade Securitisation Work
While there has been much debate over securitisation in general, there is often very little attention paid to the actual process through which securities are created, and the operations involved in monitoring and maintaining those securities. ...
Funding Through the Use of Trade Receivable Securitization
A trade receivables securitization is a way for a seller to raise capital by selling certain trade receivable assets into a special purpose vehicle (SPV), on a revolving basis. This permits the SPV to raise capital by issuing notes or taking out a loan, using the trade receivable assets as collateral. The proceeds from the loan or note then flow ba ...
Los Beneficios de la Titulización de Cobros
Segun diversas estimaciones, la cartera de cuentas a cobrar, reflejada en los estados financieros de las empresas europeas, alcanzarra un total aproximado de siete billones de euros. La financiacion de la empresa mediante la prenda, venta o cesion de sus derechos de cobro ha sido un instrumento eficiente para satisfacer sus necesidades financieras ...
Creative Thinking and Elbow Grease
In January, the Financial Accounting Standards Board (FASB) released FIN 46, an interpretation of Accounting Research Bulletin No. 51 (ARB 51), which addresses consolidation of so-called variable interest entities. The impetus was primarily Enron and its accounting abuses with respect to special purpose entities (SPEs). ...
Breaking the Funding Barrier
Account receivables financing is a highly efficient means of satisfying many financial demands and has been employed in various forms for centuries. Notwithstanding the history and breadth of funding techniques, receivables are generally inefficiently funded despite their characteristics as one of the most creditworthy and liquid assets on a balanc ...