Research On Accounting Issues Of XY Company Accounts Receivables Securitization

Asset securitization was born in the 1970 s in the United States as an innovative financing instruments. It was gradually accepted by the market and got rapid development on a global scale. Since 2014, the asset securitization market in our country has represented an explosive growth, especially the asset securitization among enterprises has significantly expanded. Because of the complexity of asset securitization project, its precise accounting treatment becomes a problem. The accounting treatment of asset securitization for sponsors includes four questions: the SPV merger problem, the recognition of the asset securitized, the measurement of the asset and the disclosure of a project. This paper focuses on the two core accounting questions:(1) Whether the SPV should be combined in the firm’s report statements.(2) Whether the transaction in the underlying assets should be derecognized in the formation of sales accounting. How the accounting standards answer to the above two questions has a direct major impact on asset securitization, which may lead to very different results of the accounting and financial performance.This paper focuses on the above two major accounting issues and select the XY company accounts receivables securitization project as a case study. First, the paper describes the basic principles of asset securitization, and then make combing analysis separately for the American Accounting Principles, International Accounting Standards and the current accounting standards in our country about the accounting treatment of these two issues. Then, the paper introduced the background of the project. Referring to the accounting standards, we discussed whether the SPV of the project should be merged, whether transferred receivables should be terminated. Finally, we found out some problems of the asset securitization accounting treatments and propose some appropriate measures to improve. XY company accounts receivables securitization project is the first asset securitization program that used trade receivables of a company as underlying assets securitized in our country. This paper chose this typical case to analyze the accounting treatment problems, which might attribute to the perfection of accounting standards of asset securitization in our country.