Define: Asset Cover

UK Accounting Glossary

Definition: Asset Cover


Quick Summary of Asset Cover


The Asset Coverage Ratio measures the ability of a company to cover it’s debt obligations with it’s assets.



What is the dictionary definition of Asset Cover?

Dictionary Definition


A ratio that provides a measure of the solvency of a company; it consists of it’s net assets divided by it’s debt.

Companies with high asset cover are considered more solvent.


Full Definition of Asset Cover


The asset coverage ratio is a risk measurement that calculates a company’s ability to repay it’s debt obligations by selling it’s assets.



Asset Cover FAQ's


How is asset coverage ratio calculated?

Asset coverage ratio formula is calculated by subtracting the current liabilities less the short-term portion of long term debt from the totals assets less intangibles and dividing the difference by the total debt.

What is ACR in banking?

In this framework, the ACR is defined as the ratio of total equity in the banking sector (held by non-banks) to total end-borrower lending plus other non-bank assets.

At a particular point in time, the ratio is a single number. The microprudential regulator takes it as given.


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Asset Cover. PayrollHeaven.com. Payroll & Accounting Heaven Ltd. https://payrollheaven.com/define/asset-cover/ (accessed: July 20, 2019).
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Asset Cover. PayrollHeaven.com. Retrieved July 20, 2019, from PayrollHeaven.com website: https://payrollheaven.com/define/asset-cover/

Definition Sources


Definitions for Asset Cover are sourced/syndicated from:

  • Oxford Dictionary Of Economics
  • BusinessDictionary.com
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 5th May 2019.