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what isthe relevance of quasi equity

The unsecured loans of partners are treated as quasi equity in the financials of certain partnership firms.

asked Oct 24, 2013 in IAS 39 - Financial Instruments: Recognition and Measurement by anonymous

1 Answer

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The terms such as quasi equity/capital, mezzanine equity/debt, junior debts generally refer to a form of financing which has the characteristics of both long term debt financing and equity financing. These investments are generally unsecured and may include flexible repayment options. In most cases quasi equity is more closer to equity than debt. This mode of financing is more popular in acquisitions & buyouts.

In most of the countries, partnerships are not considered to be legal entities on their own and have unlimited liability.
answered Oct 26, 2013 by AnaY Level 2 Member (3,240 points)