Presentation and Disclosure of Investments in PTCs and Securitization Borrowings in the Balance Sheet
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- By Chetan Kulasri
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- Last Updated on 4 December, 2024
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When a company transfers a financial asset, it must evaluate whether the transfer meets the criteria for derecognition (i.e., removing the asset from the balance sheet). If the transfer does not qualify for derecognition, the contractual rights or obligations associated with the transferred asset are not recognized separately. In such cases, these rights or obligations are treated as part of the overall transaction and not as distinct financial instruments.
In this story, we have discussed the presentation and disclosure of investments in PTCs and securitization borrowings in the Balance Sheet under Indian Accounting Standards (Ind AS). It explores whether the company’s investments in PTCs and the related securitization borrowings (financial liabilities) should be recognized as distinct financial instruments. Additionally, it examines the possibility of offsetting PTC investments against securitization borrowings in the financial statement disclosures.
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