Complex financial transactions that include income securatisations and sale of loans have been increasingly used by local financial institutes to raise capital and improve their profitability.

rnrnldblquote At minimum financial statements should include a disclosure about the complex financial transaction. The disclosure should explain the transaction and risk and rewards the company is exposed to as a result,
dblquote ICASL
quote s newly elected President, Asite Talwatte told Lanka Business Online in an interview.

rnrnComplex financial transactions are normally dealt in accounting books according to the ldblquote substance over form
dblquote concept, which requires the company to continue recognising the asset securatised, if the exposure to risks attached to the asset remains.

rnrnFor example, a bank should continue to recognise a loan portfolio sold to an investor as an asset in its books, if the investor has recourse to bank in the event of default.

rnrnICASL is also encouraging the local compan

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