Intangible assets and Private credit: Difference between pages

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1. ''Financial reporting''.
''Debt - non-bank lending - private markets.''
For accounting and financial reporting purposes, intangible assets are ones that are considered to be long-term assets but are intangible in nature, such as the value of patents and goodwill generated by the business.


Private credit is a loan to a business that is originated by a lender other than a bank or other traditional financial institution, and is not tradable in a public market.


The principles for including this kind of intangible asset in an accounting balance sheet are that the asset must:
Private credit is also sometimes known as ''direct lending'', ''alternative lending'', ''non-bank lending'' or ''private debt''.


1. Have a cost that can be reliably measured; AND


2. Be likely to give rise to future economic benefits.
Borrowers are typically small and medium sized enterprises, or smaller listed companies.


Lenders are typically regulated asset managers.


The accounting term for including such an item in a balance sheet is 'recognising' the asset.


Purposes of private credit borrowings are wide ranging, including - among other purposes - asset backed finance and trade finance.


<span style="color:#4B0082">'''''Example 1: intangible assets recognised and not recognised'''''</span>


'''1. Orderbook'''
== See also ==
 
* [[Alternative Credit Council]]  (ACC)
:Not recognised, because it does not have a cost that can be reliably measured.
* [[Asset backed finance]]
 
* [[Asset manager]]
 
* [[Credit institution]]
'''2. Employees'''
* [[Credit risk]]
* [[Creditworthiness]]
* [[Debt]]
* [[Facility]]
* [[Finance ]]
* [[Listed company]]
* [[Loan]]
* [[Packing credit]]
* [[Private bond]]
* [[Private equity]]
* [[Regulation]]
* [[Small and Medium-sized Enterprises]] (SMEs}
* [[Trade credit]]
* [[Trade finance]]


:Not normally recognised, because there is not a cost that can be reliably measured.


:Exceptions include star footballers, that have been bought. The transfer fees and other costs paid are recognised as intangible assets.  
==Other resource==
 
*[https://acc.aima.org/about-acc/about-private-credit.html Alternative Credit Council (ACC) - Private credit explained]
 
*[https://acc.aima.org/research/borrower-s-guide-to-private-credit.html Borrower's guide to private credit - UK edition - Alternative Credit Council]]
'''3. Intellectual property'''
 
:If it has been bought, Yes.
 
:If it is internally generated, No.
 
 
<span style="color:#4B0082">'''''Example 2: star players valuation'''''</span>
 
:A 'home grown' star football player should be just as valuable to a club as one who has been bought-in.
 
:But the balance sheet would only include the bought-in players, not the home grown ones.
 
:A valuation of the company for sale or purchase should recognise the playing value of all talented players, regardless of whether they were bought-in or home grown.
 
 
Relevant accounting standards include IAS 38 and Sections 18 and 19 of FRS 102.
 
 
2.  ''Assets.''
 
More broadly, any non-physical asset, whether it is a short-term asset or a longer-term one.
 
 
== See also ==
* [[Amortise]]
* [[Assets]]
* [[Balance sheet]]
* [[Brand]]
* [[Financial reporting]]
* [[Fixed assets]]
* [[Gearing]]
* [[Goodwill]]
* [[IAS 38]]
* [[Impairment]]
* [[FRS 102]]
* [[Intellectual property]]
* [[Net worth]]
* [[Patent]]
* [[Recognition]]
* [[Research & development]]
* [[Tangible asset]]
* [[Tangible net worth]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Accounting,_tax_and_regulation]]
[[Category:The_business_context]]
[[Category:Risk_frameworks]]

Revision as of 04:03, 6 February 2024

Debt - non-bank lending - private markets.

Private credit is a loan to a business that is originated by a lender other than a bank or other traditional financial institution, and is not tradable in a public market.

Private credit is also sometimes known as direct lending, alternative lending, non-bank lending or private debt.


Borrowers are typically small and medium sized enterprises, or smaller listed companies.

Lenders are typically regulated asset managers.


Purposes of private credit borrowings are wide ranging, including - among other purposes - asset backed finance and trade finance.


See also


Other resource

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