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.

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 Cover. Payroll & Accounting Heaven Ltd. November 21, 2019
Chicago Manual of Style (CMS):
Asset Cover. Payroll & Accounting Heaven Ltd. (accessed: November 21, 2019).
American Psychological Association (APA):
Asset Cover. Retrieved November 21, 2019, from website:

Definition Sources

Definitions for Asset Cover are sourced/syndicated from:

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