Commentary

D9.1005 Debtor repos and quasi-debtor repos

Corporate tax
Corporate tax | Commentary

D9.1005 Debtor repos and quasi-debtor repos

Corporate tax | Commentary

D9.1005 Debtor repos and quasi-debtor repos

A quasi-debtor repo is similar to a debtor repo but is on non-standard terms (for instance the borrower may not be the same company as that which agrees to re-purchase the securities but the company that does repurchase the securities is paid to assume the borrowers obligations).

Debtor repo

A borrowing company (or a firm of which the borrowing company is a member) has a 'debtor repo' in respect of securities if all of Conditions A to E are met. Those conditions are as follows1:

  1.  

    •     Under an arrangement, the borrower receives from another person (the lender) an advance of money or other assets ('the advance') (Condition A).

  2.  

    •     The accounts of the borrower record a financial liability in respect of the advance for the period in which it is received, in accordance with generally accepted accounting practice

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