ACCA LW · Chapter 9 · Question 9 of 11
Which of the following best describes a floating charge?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) A charge over a class of assets, present and future, which the company can deal with in the ordinary course of business until crystallisation
Explanation
A floating charge, as described in Re Yorkshire Woolcombers Association, covers a class of present and future assets which change in the ordinary course of business, and the company may deal with them until the charge crystallises. A fixed charge attaches to specific assets that the company cannot freely deal with. Fixed charges normally rank ahead of floating charges, and both require registration.
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