Book value and Capital securities: Difference between pages

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imported>Doug Williamson
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imported>Doug Williamson
(Update date - source - ECB - https://www.ecb.europa.eu/pub/pdf/fsr/art/ecb.fsrart201012_02.en.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.




Historically, the book value of an asset was generally its original cost less any depreciation or other write-down in value.
Both the quality and the quantity of capital required have been increased very significantly over time.


This was distinct from - and could be very different from - prevailing market value, the fair market price which an asset might be expected to raise if offered for sale. (Or at which a liability might be settled.)
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 more closely with market values.
Capital instruments which will no longer qualify, but which used to be eligible in the past, are being phased out over a 10-year horizon from 2013 to 2023.




== See also ==
==See also==
* [[Book entry]]
*[[Capital]]
* [[Book equity]]
*[[Capital adequacy]]
* [[Equity]]
*[[Contingent convertible capital]]
* [[Fair value]]
*[[Hybrid]]
* [[Market/book ratio]]
*[[Instrument]]
* [[Market value]]
*[[Perpetual bond]]
* [[Market value added]]
*[[Security]]
* [[Net assets]]
*[[Subordinated debt]]
* [[Net book value]]
* [[Return on capital employed]]
* [[Shareholders’ funds]]
* [[Write down]]


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

Revision as of 21:39, 23 December 2022

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, but which used to be eligible in the past, are being phased out over a 10-year horizon from 2013 to 2023.


See also