BANKER'S ACCEPTANCE Definition

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BANKER'S ACCEPTANCE (BA) is a money market instrument that is issued in discounted form. A banker's acceptance is created when a bank accepts responsibility for payment of business debt by signing a letter of credit. Banker's acceptances are sold to acceptance dealers and may be resold to numerous other parties before the loan is repaid. The investor who last owns the acceptance when the debt becomes due has a right to collect from the borrower. Should the borrower default, the investor can also pursue payment from the accepting bank.

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ACCRUAL ACCOUNTING see ACCRUAL BASIS OF ACCOUNTING.

RECOVERABLE AMOUNT is, in relation to an asset, the net amount that is expected to be recovered through the cash inflows and outflows arising from its continued use and subsequent disposal.

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