Another common term used in debt financing is the “escrow”. Here it relates to cash,securities or other valuable instruments that are held by a third party to ensure that the obligations under a contract are discharged. By doing so,the third party’s risk is being mitigated. This is commonly used in infrastructure projects like road,power,etc where an escrow account can be set up at a bank for depositing the payments.

FCCA,CA(MIA)with more than 26 years of post-qualifying working experiences. Previous working stints with one of the big accounting four,Regional GFC & Group Treasurer in a group of Malaysian and Group CFO in Singapore public listed concern.Also author to another very popular free educational accounting cum finance blog:http://basiccollegeaccounting.com under the branding of College Accounting Coach.
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