西方会计英语Unit six Off balance sheet accounti

[00:04.13]Tesxt 6.1    Cleaning up the balance she
[00:08.44]However ,it is not always the limit on borrowings power which prompts a company to seek off balance-sheet financ
[00:15.65]After all, the articles of association can ,with shareholder's approval, be amende
[00:21.21]That change will not help the management if the main problem for the business is that its borrowings are simply too hig
[00:28.19]The stock market is acutely aware of the dangers for a company which has hign levels of debt that must be service
[00:34.87]One of the crucial factors in assessing a company is its gearing ,the proportion of new borrowings to shareholders¹' fund
[00:42.58]When gearing becomes uncomfortably high, the stock market begins to get a little worried and the pressure is on the company to reduce the rati
[00:50.81]When a company finds itself in the unfortunate position of having high gearing which cannot be reduced, or even held stead
[00:57.60]out of internally generated funds, it is easy to see why the management might be lured² into one of these artificial funding scheme
[01:05.59]The off balance-sheet finance may be applied³ to reduce existing borrowing,thus bringing down the gearing rati
[01:12.57]or it may be secured in order to embark⁴ on an important project or acquisition which is needed for the company's long term future.
[01:19.49]Either way,it still represents a distortion of the company's true financial position which prevents users of the accounts obtaining a full and fair understanding of its affair
[01:30.10]and it may lead to an investment decision being taken on inappropriate ground
[01:34.69]The position was summed up by the ASC in its foreword to Statement of Standard Accounting⁵ Practice 21, which deals with leases and hire-purchase contract
[01:44.88]Leasing had become a substantial source of off balance-sheet finance, and the standard was designed to recognise the substance rather than the legal form of a leas
[01:54.10]to ensure that leased assets and the cooresponding liabilities were reflected in the account
[02:00.01]The ASC said:' When a company is leasing a substantial amount of assets instead of buying the
[02:06.64]the effect is that ,unless the leased assets and obligations are capitalised ,potentially large liabilities build up off balance-shee
[02:15.71]equally the leased assets employed are not reflected on the balance-shee
[02:21.24]These omissions⁶ may mislead users of a company's accounts--both external users and the company's own managemen
[02:28.38]It was quite a bold move by the AS
[02:31.93]The conflict between the legal form of a transaction and its practical substance is not easy one to resolv
[02:38.62]However ,the introduction of the leasing standard passed off without too much trouble,depite the complexity⁷ of the subjec
[02:45.09]By and large companies have been happy to capitalise the assets purchased under finance leases,and,to incorporate the corresponding liability to the lessor in the balance-sheet.
[02:54.89]There is still some uncertainty⁸ over the distinction between operating lease
[02:58.89]which do not need to be capitalised ,and the pure finance leases which must be reflected in the balance-shee
[03:04.87]This aside, the leasing standard must constitute something of a victory for the AS
[03:10.75]The question now, is whether it will be able to repeat its success in dealing⁹ with leasing on the new and more sophisticated off balance-sheet financing schemes which have sprung up more recentl
[03:21.61]Text 6.2  Bold proposal may lay balance sheet bare
[03:28.51]Consultation ends today on the Accounting Standards Board's proposal that securitised assets and related liabilities should be shown on the face of the balance shee
[03:38.02]It seems to have caused a great deal of consternatio
[03:41.15]In the UK,this change primarily affects those banks,insurance companies and mortgage companies which have used securitisation to fund their mortgage lendin
[03:51.84]Building societies have yet to take advantage of this funding technique,but building societies,too,appear to have greeted the ASB propsal with mixed feeling
[04:01.79]The opponents of the proposal argue that it could stop them securitising
[04:06.94]To understand why they think that may happen,it helps to know a little about the proces
[04:12.19]Securitisation is an inelegant word to describe long term structured fundin
[04:18.25]The most common method of securitisation is for the originator-the bank,insurance company and mortgage compa
[04:25.14]to transfer a pool of mortgages,to a specially¹⁰ formed compan
[04:29.87]This company ,called the issuer, may enhance the pool's credit quality, often by buying insuranc
[04:36.92]It then issues bonds using the pool as securit
[04:40.56]The process is similar to any normal method of arranging secured deb
[04:44.97]Out of the mortgage interest it receives, the issuer pays interest to bondholders and covers its own cost
[04:52.52]Part of those costs will be a fee to the mortgage administrtor, which is often ,but not always, the originator itsel
[04:59.60]Any remaining profit is usually passed back in one form or another, again to the originato
[05:05.74]In a nutshell, the ASB argues that where the originator continues to enjoy an economic benefit from the securitised mortagage
[05:13.03]whether or not the issuer is a direct subsidiary, the issuer's assets and liabilities should appear on the originating group's consolidated¹¹ balance shee
[05:22.66]The aim of all this is to present as complete a picture as possible of the total assets and liabilities of the group
[05:29.56]and when viewed in this light the logic¹² of this proposal is frankly¹³ difficult to refut
[05:34.99]There would be no problem but for the fact that most mortgage lenders who have used securitisation as a funding method have done so with the specific aim of getting the assets off the balance shee
[05:47.22]Ever since securitisation first appeared in the UK, many have regarded this ,quite incorrectly, as its principal advantag
[05:55.50]Lenders,it is said, can avoid having to use unnecessarily large amounts of capital to back their securitsed loans by shifting them off the balance shee
[06:05.66]That in turn reduces the figure which regulators take into account when working out their minimum capital requirements
[06:13.00]with the result that it frees capital for other things--and also substantially reduces the apparent level of gearin
[06:21.07]Many lenders argue that this state of affairs is quite acceptabl
[06:25.78]Their view is that the balance sheet should only show assets which carry significant ris
[06:30.71]and since the risk associated with securitised assets is remote or even non-existent
[06:36.28]there is no point in clogging¹⁴ up balance sheets with irrelevant¹⁵ figure
[06:40.43]That argument is specious¹⁶ for two reason
[06:43.41]Firstly, risk has never been a determining factor in consolidatio
[06:48.01]Secondly, even if it were relevant,those who use this argument are referring solely¹⁷ to the credit risk,and not to all the risks inherent in lendin
[06:58.43]Whilst the credit risk may indeed be insured away,the risk that profits and service charges will fluctuat
[07:04.91]sometimes by enough to turn into losses,will clearly remai
[07:09.14]If these losses are being borne by the originator, the parent company is obviously bearing both a liquidity¹⁸ risk and a margin¹⁹ ris
[07:17.79]The only way to avoid any form of risk is to sell the assets outright²⁰ ,which implies that the originator receives no further economic benefit whatsoever²¹ from the mortgage
[07:27.90]However ,a sale is clearly a very different process from a securitised bond issu
[07:34.30]Looked at in this light, the ASB seems to have a pretty unassailable cas
[07:39.78]Does it, however,follow that the securitisation market is dea
[07:44.48]Not at all, The principal advantage of securitisation is not that it takes assets off the balance sheet
[07:51.80]but that it provides non-recourse funding to maturit
[07:55.56]A lender can offer long term loans secure in the knowledge that the funds to finance them will be there until either the loan matures or the borrower decides to repay i
[08:05.15]That is a luxury denied to many lenders, building societies included, who fund their mortgages principally out of short term deposits either from retail²² savers or from larger scale investor²³
[08:17.55]Apart from the constant need to adjust rates to ensure that volatile²⁴ short term funds are not withdraw
[08:24.19]this funding method carries a large liquidity ris
[08:27.35]As the aftermath of the BCCI affair earlier in the year showed
[08:31.74]it does not take very much for investors²⁵ to become nervous ,with potentially disastrous²⁶ consequences for lender
[08:39.18]If the ASB proposal becomes mandatory²⁷ ,as I have little doubt it will, there may well ,at the margi
[08:46.21]be a reduction in the number of organisations issuing mortgage backed securities, despite their funding advantage
[08:53.73]But those who continues to securitise will be doing it for the right reasons and they will have shown themselves to be long term participants in the mortgage marke
[09:02.75]There may even be an increase in sales of mortgage portfolios²⁸ by institutions unwilling²⁹ or unable to carry the assets and related liabilities on their balance sheet
[09:13.04]To some extent this is already happenin
[09:15.60]In the last 12 months, Household Mortgage Corporation has acquired three mortgage portfolios totalling some $ 600
[09:25.00]We are negotiating about several mor
[09:27.64]Although these sales were made with comprehensive warranties³⁰, there is no doubt that they were genuine sales within the ASB definitio
[09:35.71]They immediately reduced the size of the respective vendors'balance sheet
[09:40.26]Despite its potential impact on the mortgage market, any accounting change which results in better,clearer accounts is to be welcome
[09:48.59]If this particular proposal can bring about better understanding of the real merits of securitisation as well,then it is very good new

1 shareholders   

n.股东( shareholder的名词复数 )

参考例句：

• The meeting was attended by 90% of shareholders. 90%的股东出席了会议。
• the company's fiduciary duty to its shareholders 公司对股东负有的受托责任

2 lured   

吸引，引诱（lure的过去式与过去分词形式）

参考例句：

• The child was lured into a car but managed to escape. 那小孩被诱骗上了车，但又设法逃掉了。
• Lured by the lust of gold,the pioneers pushed onward. 开拓者在黄金的诱惑下，继续奋力向前。

3 applied   

adj.应用的；v.应用，适用

参考例句：

• She plans to take a course in applied linguistics.她打算学习应用语言学课程。
• This cream is best applied to the face at night.这种乳霜最好晚上擦脸用。

4 embark   

vi.乘船，着手，从事，上飞机

参考例句：

• He is about to embark on a new business venture.他就要开始新的商业冒险活动。
• Many people embark for Europe at New York harbor.许多人在纽约港乘船去欧洲。

5 accounting   

n.会计，会计学，借贷对照表

参考例句：

• A job fell vacant in the accounting department.财会部出现了一个空缺。
• There's an accounting error in this entry.这笔账目里有差错。

6 omissions   

n.省略( omission的名词复数 )；删节；遗漏；略去或漏掉的事（或人）

参考例句：

• In spite of careful checking, there are still omissions. 饶这么细心核对，还是有遗漏。 来自《现代汉英综合大词典》
• It has many omissions; even so, it is quite a useful reference book. 那本书有许多遗漏之处，即使如此，尚不失为一本有用的参考书。 来自《现代汉英综合大词典》

7 complexity   

n.复杂(性)，复杂的事物

参考例句：

• Only now did he understand the full complexity of the problem.直到现在他才明白这一问题的全部复杂性。
• The complexity of the road map puzzled me.错综复杂的公路图把我搞糊涂了。

8 uncertainty   

n.易变，靠不住，不确知，不确定的事物

参考例句：

• Her comments will add to the uncertainty of the situation.她的批评将会使局势更加不稳定。
• After six weeks of uncertainty,the strain was beginning to take its toll.6个星期的忐忑不安后，压力开始产生影响了。

9 dealing   

n.经商方法，待人态度

参考例句：

• This store has an excellent reputation for fair dealing.该商店因买卖公道而享有极高的声誉。
• His fair dealing earned our confidence.他的诚实的行为获得我们的信任。

10 specially   

adv.特定地；特殊地；明确地

参考例句：

• They are specially packaged so that they stack easily.它们经过特别包装以便于堆放。
• The machine was designed specially for demolishing old buildings.这种机器是专为拆毁旧楼房而设计的。

11 consolidated   

a.联合的

参考例句：

• With this new movie he has consolidated his position as the country's leading director. 他新执导的影片巩固了他作为全国最佳导演的地位。
• Those two banks have consolidated and formed a single large bank. 那两家银行已合并成一家大银行。

12 logic   

n.逻辑(学)；逻辑性

参考例句：

• What sort of logic is that?这是什么逻辑？
• I don't follow the logic of your argument.我不明白你的论点逻辑性何在。

13 frankly   

adv.坦白地，直率地；坦率地说

参考例句：

• To speak frankly, I don't like the idea at all.老实说，我一点也不赞成这个主意。
• Frankly speaking, I'm not opposed to reform.坦率地说，我不反对改革。

14 clogging   

堵塞，闭合

参考例句：

• This process suffers mainly from clogging the membrane. 这种过程的主要问题是滤膜的堵塞。
• And you know that eyewitness that's been clogging up the airwaves? 你知道那个充斥着电视广播的目击证人？

15 irrelevant   

adj.不恰当的，无关系的，不相干的

参考例句：

• That is completely irrelevant to the subject under discussion.这跟讨论的主题完全不相关。
• A question about arithmetic is irrelevant in a music lesson.在音乐课上，一个数学的问题是风马牛不相及的。

16 specious   

adj.似是而非的；adv.似是而非地

参考例句：

• Such talk is actually specious and groundless.这些话实际上毫无根据，似是而非的。
• It is unlikely that the Duke was convinced by such specious arguments.公爵不太可能相信这种似是而非的论点。

17 solely   

adv.仅仅，唯一地

参考例句：

• Success should not be measured solely by educational achievement.成功与否不应只用学业成绩来衡量。
• The town depends almost solely on the tourist trade.这座城市几乎完全靠旅游业维持。

18 liquidity   

n.流动性，偿债能力，流动资产

参考例句：

• The bank has progressively increased its liquidity.银行逐渐地增加其流动资产。
• The demand for and the supply of credit is closely linked to changes in liquidity.信用的供求和流动资金的变化有密切关系。

19 margin   

n.页边空白；差额；余地，余裕；边，边缘

参考例句：

• We allowed a margin of 20 minutes in catching the train.我们有20分钟的余地赶火车。
• The village is situated at the margin of a forest.村子位于森林的边缘。

20 outright   

adv.坦率地；彻底地；立即；adj.无疑的；彻底的

参考例句：

• If you have a complaint you should tell me outright.如果你有不满意的事，你应该直率地对我说。
• You should persuade her to marry you outright.你应该彻底劝服她嫁给你。

21 whatsoever   

adv.（用于否定句中以加强语气）任何；pron.无论什么

参考例句：

• There's no reason whatsoever to turn down this suggestion.没有任何理由拒绝这个建议。
• All things whatsoever ye would that men should do to you,do ye even so to them.你想别人对你怎样，你就怎样对人。

22 retail   

v./n.零售；adv.以零售价格

参考例句：

• In this shop they retail tobacco and sweets.这家铺子零售香烟和糖果。
• These shoes retail at 10 yuan a pair.这些鞋子零卖10元一双。

23 investor   

n.投资者，投资人

参考例句：

• My nephew is a cautious investor.我侄子是个小心谨慎的投资者。
• The investor believes that his investment will pay off handsomely soon.这个投资者相信他的投资不久会有相当大的收益。

24 volatile   

adj.反复无常的，挥发性的，稍纵即逝的，脾气火爆的；n.挥发性物质

参考例句：

• With the markets being so volatile,investments are at great risk.由于市场那么变化不定，投资冒着很大的风险。
• His character was weak and volatile.他这个人意志薄弱，喜怒无常。

25 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

26 disastrous   

adj.灾难性的，造成灾害的；极坏的，很糟的

参考例句：

• The heavy rainstorm caused a disastrous flood.暴雨成灾。
• Her investment had disastrous consequences.She lost everything she owned.她的投资结果很惨，血本无归。

27 mandatory   

adj.命令的；强制的；义务的；n.受托者

参考例句：

• It's mandatory to pay taxes.缴税是义务性的。
• There is no mandatory paid annual leave in the U.S.美国没有强制带薪年假。

28 portfolios   

n.投资组合( portfolio的名词复数 )；（保险）业务量；（公司或机构提供的）系列产品；纸夹

参考例句：

• Price risk arises in non-trading portfolios, as well as in trading portfolios. 价格风险中出现的非贸易投资，以及在贸易投资组合。 来自互联网
• How do we fatten our portfolios and stay financially healthy? 我们怎样育肥我们的投资结构和维持财政健康呢？ 来自互联网

29 unwilling   

adj.不情愿的

参考例句：

• The natives were unwilling to be bent by colonial power.土著居民不愿受殖民势力的摆布。
• His tightfisted employer was unwilling to give him a raise.他那吝啬的雇主不肯给他加薪。

30 warranties   

n.保证书，保单( warranty的名词复数 )

参考例句：

• I read and compare warranties before purchasing. 我在购买前阅读和比较保修单。 来自超越目标英语 第4册
• One way of ensuring reliability is insisting on guarantees and warranties. 要确保产品可靠性的一个方法，就是坚持制定产品的品质保证条款。 来自互联网