Securitisation and Useful life: Difference between pages

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imported>Doug Williamson
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(Add quote from IAS 16 - https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-a/ias-16-property-plant-and-equipment.pdf?bypass=on)
 
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1.   
''Accounting''.  
   
The length of time an asset is in use.


The process of converting non-tradable assets into tradable securities.
The asset should be depreciated over its useful life.


This is often undertaken through a securitisation special purpose vehicle.


:<span style="color:#4B0082">'''''Estimation of useful life for IAS 16 financial reporting is a matter of judgement'''''</span>


The credit risk of the assets is divided into tranches, and payments to the investors are dependent on the performance of the assets.
:"The useful life of an asset is defined in terms of the asset’s expected utility to the entity.  


When a special purpose vehicle is used, the assets are transferred to the special purpose vehicle, which then issues securities.
:The asset management policy of the entity may involve the disposal of assets after a specified time or after consumption of a specified proportion of the future economic benefits embodied in the asset.  


:Therefore, the useful life of an asset may be shorter than its economic life.


2.
:The estimation of the useful life of the asset is a matter of judgement based on the experience of the entity with similar assets."


The tradable securities created by the securitisation process.
:''IAS 16 - Property, plant and equipment - paragraph 57.''




3.
== See also ==
 
* [[Accounting]]
The trend for large companies to use less bank lending facilities and instead to issue their own securities direct to the markets.
* [[Asset management]]
 
* [[Depreciating asset]]
* [[Depreciation]]
* [[Economic life]]
* [[Financial reporting]]
* [[IAS 16]]
* [[Judgement]]
* [[Life]]
* [[Property, plant and equipment]]
* [[Reporting entity]]
* [[Short life asset]]
* [[Useful economic life]]
* [[Utility]]


== See also ==
* [[CDO]]
* [[Covered bond]]
* [[Factoring]]
* [[Securitisation special purpose vehicle]]
* [[Securitisation swap]]
* [[Security]]
* [[Significant Risk Transfer]]
* [[SSPE]]
* [[Sukuk]]
* [[CMBS]]


==Other resource==
*[https://www.ifrs.org/content/dam/ifrs/publications/pdf-standards/english/2022/issued/part-a/ias-16-property-plant-and-equipment.pdf?bypass=on IAS 16 text]]


===Other links===
[[Category:Accounting,_tax_and_regulation]]
[http://www.treasurers.org/node/9209 The return of securitisation, The Treasurer, July 2013]


[[Category:Long_term_funding]]
[[Category:Accounting,_tax_and_regulation]]

Revision as of 21:12, 29 October 2023

Accounting.

The length of time an asset is in use.

The asset should be depreciated over its useful life.


Estimation of useful life for IAS 16 financial reporting is a matter of judgement
"The useful life of an asset is defined in terms of the asset’s expected utility to the entity.
The asset management policy of the entity may involve the disposal of assets after a specified time or after consumption of a specified proportion of the future economic benefits embodied in the asset.
Therefore, the useful life of an asset may be shorter than its economic life.
The estimation of the useful life of the asset is a matter of judgement based on the experience of the entity with similar assets."
IAS 16 - Property, plant and equipment - paragraph 57.


See also


Other resource

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