Capital is the blood of an enterprise and a problem that cannot be ignored. It is the key to the success or failure of financing to sort out the financing problems and make good preparations for financing.
1. Lies
Leasing is a traditional off-balance sheet financing method. Because leasing is divided into operating leasing and financing leasing, only operating leasing can be regarded as a reasonable and legal off-balance sheet financing method. Therefore, the lessee will often rack his brains to conclude a lease agreement with the lessor and try his best to avoid it, so that the contract that is essentially a financial lease is treated as an operating lease for accounting purposes in order to obtain the benefits of off-balance sheet financing.
2. Joint ventures
A joint venture refers to a mode of operation in which an enterprise holds a considerable number of other enterprises, but does not reach the holding level. The latter is called an unincorporated enterprise. By arranging the investment structure and engaging in off-balance-sheet business in non-corporate enterprises, people can get the benefits of full holding as much as possible, without involving merger, and there is no need to reflect the debts of non-corporate enterprises on the balance sheet. There is also a more popular form called Special Purpose Entity (SPE), that is, enterprises set up new enterprises as sponsors, which are called special purpose entities, and their business activities basically serve the interests of sponsors. Generally speaking, SPE's liabilities are quite high, and the lower the owner's equity, the better. Although the sponsors have little or no ownership interest, they bear all the risks. It is by using SPE that Enron overestimated its profits of $59.65438+0.997 ~ 2,000 and concealed its liabilities of $2.585 billion.
3. Asset securitization
Asset securitization refers to the process of transforming assets that lack liquidity but can generate predictable and stable cash flow into securities that can be sold and circulated in the financial market through certain structural arrangements. Securitization financing business is usually the business of securitizing financial assets such as credit assets of banks, transactions or service receivables of enterprises. For example, the sale of accounts receivable with recourse is essentially a loan secured by accounts receivable, but in the current accounting practice, enterprises transfer the sold accounts receivable as assets without recognizing liabilities. As an effective off-balance-sheet financing method, securitization is very popular in the United States in recent years, and it has developed in the types and values of securitized financial assets. Enron? Revitalize? One of the methods of assets is the securitization of energy commodities.
4. Innovative financial instruments
At present, it is a big outbreak of innovative financial instruments, including swaps, embedded options, compound options, upper limit options, lower limit options, upper and lower winning rights and so on. Due to the rapid change of environment, the need of risk control, the intensification of competition, and the development of analytical technology and information technology, this trend is increasing and will continue. However, the formulation of accounting standards has not kept pace with the development of innovative financial instruments. Therefore, according to the current accounting standards, most innovative financial instruments are not reflected in the financial statements, and the liabilities arising from financing through innovative financial instruments will naturally not be reflected in the balance sheet. Enron won Fortune magazine 1995? The most innovative? The company's innovation achievements are mainly in financial instruments? Creative use? Such as futures, options and other derivative financial instruments used to develop energy commodities.
In addition, consignment, processing with supplied materials, product financing agreement and bill receivable discount are also common off-balance sheet financing methods.
What is off-balance sheet financing?
Off-balance sheet financing refers to off-balance sheet financing, off-balance sheet financing, off-balance sheet financing and off-balance sheet financing.
In a narrow sense, it is a financial act to raise funds for a capital (financing) lease that does not meet all the conditions, so that the present value of the promised payment is not recognized as a liability (nor as an asset) and is not reflected in the balance sheet or notes. This term is mainly used by professionals in the fields of finance and accounting (see? Operating lease? )。 Off-balance sheet financing is also used for some leveraged business leasing. The fund provider has no recourse to the lessor, and can only ask the lessee to recover the loan from the lessor with the leased assets (see? Leveraged operating lease? )。 (W.W.Cooper, Yuiji ijiri: Kohler? Accounting Dictionary, 6th Edition, p. 357)
Broadly speaking, off-balance sheet financing refers to all financing activities that have a significant impact on the operating results, financial status and cash flow of an enterprise and are not included in the balance sheet.
Characteristics of off-balance sheet financing
Confidentiality, assets and potential liabilities formed by off-balance sheet financing do not need to be confirmed and reflected in the balance sheet, that is, the real financial situation of the enterprise cannot be reflected in the balance sheet;
Flexibility: Off-balance-sheet financing has relatively low requirements for enterprise asset scale, which also greatly enhances the flexibility of financing channels;
Risk, because off-balance sheet financing hides the real assets and liabilities of enterprises, its financial statements are more deceptive.
Ways to realize off-balance sheet financing
(1) Off-balance sheet direct financing. Financing in the form of special loans that do not transfer the ownership of assets. For example, business activities such as leasing, consignment goods, and processing with supplied materials. It does not involve the transfer and flow of asset ownership, and it does not need to be reflected in financial statements in accounting, but the right to use assets has indeed been transferred to financing enterprises, which can meet the needs of enterprises to expand their business scale and alleviate the shortage of funds.
(2) Off-balance-sheet indirect financing is another financing method to replace liabilities. The most common way is to establish and invest in a subsidiary, or to replace the liabilities of the parent company with the liabilities of the subsidiary or subsidiary.
(3) Off-balance-sheet transfer of liabilities refers to the transfer of liabilities from on-balance-sheet to off-balance-sheet by financing enterprises. This transfer can be realized by discounting bills receivable, selling accounts receivable with recourse, and signing product financing agreements. In fact, due to the mortgage nature of accounts receivable, its liabilities are transferred to the off-balance sheet due to accounting treatment. Off-balance sheet financing is mainly debt financing, and its positive role lies in enabling enterprises to increase financial leverage, especially when financial leverage is limited in the balance sheet, which can be used to amplify financial leverage and improve the profit rate of equity capital. At the same time, in order to increase financing methods, we can open up financing channels, especially in the case of limited on-balance-sheet liabilities and outdated channels, and we can achieve financing purposes through off-balance-sheet financing.
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