Define: Asset-Backed Security

UK Accounting Glossary

Definition: Asset-Backed Security

Quick Summary of Asset-Backed Security

An asset-backed security (ABS) is a financial security collateralised by a pool of assets such as loans, leases, credit card debt, royalties or receivables.


What is the dictionary definition of Asset-Backed Security?

Dictionary Definition

An Asset-Backed Security (ASB) is a bond or note whose collateral is the cash flows from a pool of financial obligations such as mortgages, car loans, or credit-card receivables.


Full Definition of Asset-Backed Security

An assetbacked security (ABS) is a security whose income payments and hence value are derived from and collateralised (or “backed“) by a specified pool of underlying assets. The pool of assets is typically a group of small and illiquid assets which are unable to be sold individually.

For investors, assetbacked securities are an alternative to investing in corporate debt.

Asset-backed securities (ABS) alongside mortgage-backed securities (MBS) are two of the most important types of asset classes within the fixed-income sector.


Cite Term

To help you cite our definitions in your bibliography, here is the proper citation layout for the three major formatting styles, with all of the relevant information filled in.

Page URL
Modern Language Association (MLA):
Asset-Backed Security. Payroll & Accounting Heaven Ltd. November 12, 2019
Chicago Manual of Style (CMS):
Asset-Backed Security. Payroll & Accounting Heaven Ltd. (accessed: November 12, 2019).
American Psychological Association (APA):
Asset-Backed Security. Retrieved November 12, 2019, from website:

Definition Sources

Definitions for Asset-Backed Security are sourced/syndicated from:

This glossary post was last updated: 7th May 2019.