An advance under a debtor repo or debtor quasi-repo is treated
as a money debt owed by the borrower (or, if the borrower is a
member of a partnership, by the partnership) to the person to whom
the securities are sold. This money debt is treated as arising from
a transaction for the lending of money, so the borrower is treated
as party to a debtor loan relationship in an amount equal to the
advance (s81 FA 1996).
The effect of treating the whole arrangement as a loan
relationship is that all amounts in the borrower’s accounts
in respect of the advance in accordance with GAAP, including items
such as exchange gains and losses, are brought into account under
the loan relationship rules.