Stranded assets are "assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities".[1] Stranded assets can be caused by a variety of factors and are a phenomenon inherent in the 'creative destruction' of economic growth, transformation and innovation; as such they pose risks to individuals and firms and may have systemic implications.[2] Climate change is expected to cause a significant increase in stranded assets for carbon-intensive industries and investors, with a potential ripple effect throughout the world economy.[3][4]
The term is important to financial risk management in order to avoid economic loss after an asset has been converted to a liability. Accountants have measures to deal with the impairment of assets (e.g. IAS 16) which seek to ensure that an entity's assets are not carried at more than their recoverable amount.[5] In this context, stranded assets are also defined as an asset that has become obsolete or non-performing, but must be recorded on the balance sheet as a loss of profit.[6]
^"Stranded Assets Programme". Smith School of Enterprise and the Environment. 25 March 2014. Archived from the original on 27 March 2014. Retrieved 11 April 2014.
^Background Briefing, UNEP Inquiry into the Design of a Sustainable Financial System(PDF), United Nations Environment Programme, June 2014, archived from the original (PDF) on 2014-10-06, retrieved 2014-07-09
^Cite error: The named reference Brown was invoked but never defined (see the help page).
^Cite error: The named reference Rezai was invoked but never defined (see the help page).
^"IAS 16". Deloitte. 9 July 2014. Retrieved 9 July 2014.
^"Stranded Asset". Business Dictionary. Archived from the original on 13 April 2014. Retrieved 11 April 2014.
Strandedassets are "assets that have suffered from unanticipated or premature write-downs, devaluations or conversion to liabilities". Stranded assets...
Measure of excess RiskLab – Canadian research laboratory Strandedasset – Former physical asset, now a liability Systemic risk – Risk of collapse of an...
incumbent to compete more efficiently against new entrants. Strandedasset "What's Stranded Cost?". Tennessee Power Company. Archived from the original...
expected to post profits and to retain a certain ratio (threshold) of their assets in government fixed interest bonds. Mehta squeezed capital out of the banking...
Business risk Reputational risk Operational risk Country risk Political risk Legal risk Moral hazard Profit risk Non-financial risk Strandedasset v t e...
estimation of the variance-covariance matrix, one can generate a forecast of asset distributions via Monte-Carlo simulation based upon the Gaussian copula...
of various assets and liabilities. The most common techniques include: Marking to market, calculating the net market value of the assets and liabilities...
divestment Financial economics Tax resistance Socially responsible investing Strandedasset Brauer, Matthias (December 2006). "What Have We Acquired and What Should...
credit card, line of credit, or other loan. A company is unable to repay asset-secured fixed or floating charge debt. A business or consumer does not pay...
substantial subsidies in 2021. Some coal-fired power stations could become strandedassets, for example China Energy Investment, the world's largest power company...
and create policy that addresses the societal burdens created by the strandedassets of the fossil fuel industry. International policy, in the form of United...
financial asset, security or commodity cannot be traded quickly enough in the market without impacting the market price. Market liquidity – An asset cannot...
scam broke in India. India's Enforcement Directorate has begun attaching assets of the accused and is seeking to immediate confiscation under the Fugitive...
environment that may adversely affect operating profits or the value of assets in the country. For example, financial factors such as currency controls...
sudden flight to quality, creating many sellers but few buyers for illiquid assets. These interlinkages and the potential "clustering" of bank runs are the...
into three segments: equity funds, hybrid funds, and debt funds. The total Assets Under Management (AUM) of the Indian mutual fund industry as of December...
per the case of Arthur Andersen. Reputation is recorded as an intangible asset in a company's financial records. Hence, damage to a firm's reputation has...
Business risk Reputational risk Operational risk Country risk Political risk Legal risk Moral hazard Profit risk Non-financial risk Strandedasset v t e...
Basel III capital regulation, which is primarily based on risk-weighted assets, may further negatively affect the stability of the financial system. The...
was deployed in this period and "voters were furious." The US Troubled Asset Relief Program authorized up to $700bn of government support of which $426bn...
Loan-to-value (LTV) is the ratio of loan amount to the actual value of asset purchased. The RBI regulates this ratio so as to control the amount a bank...
standardized asset-categorizations, applying the aside frameworks, and the resultant capital — at least 12.9% of these Risk-weighted assets (RWA) — must...
portfolios are less diverse and therefore the returns on the underlying assets are more correlated. Concentration risk is usually monitored by risk functions...
assets and net liabilities solely from exchange rate differences. Following this logic, a firm could acquire an appropriate amount of exposed assets or...