Book value and Capital securities: Difference between pages

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imported>Doug Williamson
(Create the page. Sources: HSBC AR 2105; BIS http://www.bis.org/bcbs/basel3/basel3_phase_in_arrangements.pdf)
 
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''Accounting.''
''Bank supervision - capital adequacy''.


The value as recorded in a company’s books, in other words its accounts including its published balance sheet.
Capital securities are securities issued by a regulated institution, which are eligible for inclusion in its capital, for capital adequacy assessment purposes.


Both the quality and the quantity of capital required have been increased very significantly over time.


Historically, the book value of an asset was generally its original cost less any depreciation or other write-down in value. 


This was distinct from - and could be very different from - prevailing market value, the fair market price which the asset might be expected to raise if offered for sale.
Eligible capital securities include perpetual subordinated capital securities and contingent convertible capital securities.




In order to address the problems arising from differences between book values and market values, accounting practice has moved substantially toward a system of book valuation which is aligned much more closely with market values.
Capital instruments which will no longer qualify in the future, but which used to be eligible in the past, are being phased out over a 10-year horizon from 2013 to 2022.




== See also ==
==See also==
* [[Book entry]]
*[[Capital]]
* [[Equity]]
*[[Capital adequacy]]
* [[Fair value]]
*[[Contingent convertible capital]]
* [[Market value]]
*[[Hybrid]]
* [[Market value added]]
*[[Instrument]]
* [[Net book value]]
*[[Perpetual bond]]
* [[Return on capital employed]]
*[[Security]]
* [[Shareholders’ funds]]
*[[Subordinated debt]]
* [[Write down]]
 
[[Category:Accounting,_tax_and_regulation]]

Revision as of 15:55, 29 October 2016

Bank supervision - capital adequacy.

Capital securities are securities issued by a regulated institution, which are eligible for inclusion in its capital, for capital adequacy assessment purposes.

Both the quality and the quantity of capital required have been increased very significantly over time.


Eligible capital securities include perpetual subordinated capital securities and contingent convertible capital securities.


Capital instruments which will no longer qualify in the future, but which used to be eligible in the past, are being phased out over a 10-year horizon from 2013 to 2022.


See also

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