Special Purpose Vehicle Institutions : Their Business Natures and Accounting Implications  

Oleh:

Na'Im, Ainun ; Na'im, Ainun

Jenis: Article from Journal - ilmiah nasional - tidak terakreditasi DIKTI
Dalam koleksi: International Journal of Business vol. 8 no. 1 (Jan. 2006), page 1-20.
Topik: FINANCE; consolidation of financial reports; off balance sheet; project finance; and asset securitization; special purpose vehicle (SPV); variable interest entities (VIE)

Ketersediaan

Perpustakaan Pusat (Semanggi) Nomor Panggil: II51.5 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

Special Purpose Vehicle (SPV) is an instrumental institution used for specific purposes by firms. The SPV is useful for tax planning, risk management, project financing and company restructuring. SPV s have benefits for economy and business, and involve usually large size of projects that vary from about US$100 to US$500 million per project. However, SPV s have also some bad records. Huge business, finance, and accounting scandals involve the use of SPV s. The drawbacks of SPV s are due to lack of regulatory measures relating the application of SPV s, so that SPV s are used for hiding identities, debts and hiding non - productive assets. SPV s are used to deceive investors so that they can not judge the value and risks of the firms and investments correctly. The huge financial and accounting scandals such as Enron involved the use of SPVs for not reporting or undervaluing debt and overvaluing net worth. In Indonesia, there are some transactions that are under public scrutiny that use SPV s, such as the sales of the government stocks of BCA Bank, and PT Indosat. There are also many successful and beneficial uses of SPV s in Indonesia as well, such as those in energy development, oil refinery, and telecommunication projects. This paper explains the natures of SPV s and discusses the accounting implications of SPV s. This paper also discusses the use of SPV s in various projects such as in banking, insurance, natural resources, energy and Islamic banking. The important accounting implications of SPV s : consolidation of financial reports and disclosures of SPVs are analyzed in more details. The negative effects of SPV s may be reduced with enough regulation on consolidation of financial reporting and disclosures. With these regulations, SPV s cannot be used to deceive investors and also cannot be used for hiding identities, assets and liabilities.

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