Securitization through the use of a properly structured SPE may result in the following benefits to the company:
I. Remove receivables from the balance sheet.
II. Remove debt from the balance sheet.
III. Lower financing costs.
IV. Recognize gains on the sale of assets to the SPE.
A) I, II, III and IV
B) I, II and III
C) I and IV
D) II and III

Question

Quizplus · Accepted Answer

I, II, and III are correct because securitization can remove receivables and debt from the balance sheet, and lower financing costs. IV is incorrect because gains on the sale of assets to the SPE are not recognized until the assets are sold to a third party.

Securitization Through the Use of a Properly Structured SPE May