I searched up many post and read through peoples answers, but stil not clear about the impact on BS when we seuritized recivable, and sold the receivable. Does a SPE involved in both transactions?
Q16 answer said “Had the securitized receivables been held on the balance sheet, assets would have been $267,500 higher, or $3,878,100, and equity would have been unchanged”
Q17 answer said “If the receivables had been held on the balance sheet, both assets and liabilities would have been $267,500 higher”
I can only assume they borrow money against the securitized receivables and that increase both cash and liability? Is that also mean A/R will decreased and HFT securities increased?
***Can anyone make an example or explain on what will be changed on BS when we***
1) seuritized recivables
2) sold the receivables
on both unconsolidated and consolidated (with SPE) financial statement?
Thank you!
Q16 answer said “Had the securitized receivables been held on the balance sheet, assets would have been $267,500 higher, or $3,878,100, and equity would have been unchanged”
Q17 answer said “If the receivables had been held on the balance sheet, both assets and liabilities would have been $267,500 higher”
I can only assume they borrow money against the securitized receivables and that increase both cash and liability? Is that also mean A/R will decreased and HFT securities increased?
***Can anyone make an example or explain on what will be changed on BS when we***
1) seuritized recivables
2) sold the receivables
on both unconsolidated and consolidated (with SPE) financial statement?
Thank you!