Company securitizes $2 million of its receivables. Does cash collected from customers increase by $2 M or decrease by $2 M, or does it stay the same?作者: Rasec 时间: 2011-7-13 16:10
cash collected from customers =
Change in Revenues - Delta AR + Delta Unearned Earnings
Delta AR = -2
So Cash Collected would go UP!...
[but in the context of things - this is not sustainable].
CP作者: needhelp1700 时间: 2011-7-13 16:10
Looks like it goes down by $2!作者: wxs1986 时间: 2011-7-13 16:10
- (-2)
CP作者: comp_sci_kid 时间: 2011-7-13 16:10
the timing of the AR Securitization is not clear... also whether the 16 Mill is after the asset securitiziation or before...
CP作者: WarrenB1 时间: 2011-7-13 16:10
Yep, i know that question. Its a matter of timing of the securitization.
But while we are on this topic, does anyone have a quick and easy tutorial on what happens in a securitization of receivables?
Like you sell your receivables, what happens to all your ratios? For some reason I keep struggling with this. If anyone has a link, that would be nice. thanks.作者: mp3bu 时间: 2011-7-13 16:10
It depends of course!
If you securitize A/R without consolidating the SPE, your A/R drop by the amount that you securitized), so A/R goes down...think of ratios that depend on A/R.
If you consolidate the SPE, then A/R does not change.
Also, you have another asset added, which is the investment in the SPE.作者: mengxu 时间: 2011-7-13 16:10
ok, not sure the best way to think of this, but it seems they are assuming that if the $2million of A/R securitization had not been securitized, your A/R would be $118. Thus, Cash = $137 - (118-111) = $130..
But, I thought the whole idea of A/R securitization is to collect the cash! So, the way I would do it is $137 + $2 - ($116-$111) = $134.作者: Newhuman 时间: 2011-7-13 16:10
u know, for all the agony with consolidating the SPE, seriously, it is possible to NOT consolidate the #$!@ SPE?!
when would you ever not consolidate?
i feel like at some point you could have QSPEs, etc and they havent deleted from curriculum yet!
when would you ever NOT consolidate, under GAAP or IFRS?
