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Financial instrument ( IND AS 32 )
Financial Reporting
Are asset-backed securities that are backed by physical assets considered financial assets under IND AS 32? How are these asset-backed securities classified and accounted for, and what criteria are used to determine their classification? Can you give an example of how physical assets can be used to back asset-backed securities, and how this impacts their treatment under IND AS 32?
Answers (3)
CA Suraj Lakhotia Admin
To be classified as Financial Asset - The entity must have a right to receive cash or other financial asset etc. So while classifying you need to evaluate this aspect.
In the context of asset-backed securities, which criteria should be used to classify the physical assets that back the securities as financial assets - the fact that they generate cash flows to repay investors or the entity's right to receive cash or other financial asset? Or should both criteria be considered
Thread Starter
shivaji hariIn the context of asset-backed securities, which criteria should be used to classify the physical assets that back the securities as financial assets - the fact that they generate cash flows to repay investors or the entity's right to receive cash or other financial asset? Or should both criteria be considered
the underlying assets would be accounted as per the respective standards.
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