In addition to attachment, the PPSA requires that it be reasonably clear (or ascertainable) to third parties what collateral is covered by a security interest. This is consistent with the policy of the PPSA that all financing transactions be brought to the light of day and made visible to others so that creditors can better assess which collateral of a debtor or grantor is encumbered.

The PPSA calls this step enforceability against third parties. It is an interim step between attachment and perfection.

Upon attachment, which, from above, requires

(a) the grantor to have or receive rights in the collateral, and

(b) either the secured party to give value, or the grantor to do an act by which the security interest arises)

a security interest is enforceable predominantly against the grantor.

Upon being perfected, a security interest attains strength against the world at large because it

(a) will not be on risk of being invalidated (vesting in the grantor) upon the liquidation or administration of the grantor,

(b) will attain strength (but will not necessarily come first) in priority contests with other security interests in the same collateral, and

(c) will be less exposed to being extinguished if the collateral is leased or transferred.

In- between attachment and perfection, the PPSA requires a secured party to be able to demonstrate to the outside world exactly what his or her security interest covers.

The police badge below is the symbol which represents that a security interest under the PPSA must be enforceable against third parties.

To satisfy the requirement of being enforceable against third parties, either:

(a) there must be a security agreement that describes collateral which is either written, or evidenced
in writing, and signed or adopted by the grantor. Writing can be an email or similar, and the grantor can sign or adopt or otherwise accept the writing, so there is no need for a formal security agreement¹; or

(b) the secured party can take possession or control of the collateral over which a security interest is held, in which case no writing is necessary.

Query whether arrangements such as standard trade terms used by suppliers that contain retention of title clauses or other security interests, and which are never actually signed or formally agreed with buyers but are used over long periods, can be said to be impliedly accepted by a buyer, or incorporated into the sale contract by custom or usage. Little appears to change here from pre-PPSA practice. A retention of title or other similar clause must, of course, form part of a sale contract. The clause would have to satisfy the test for being incorporated into the sale contract terms, either as an express contract term, or as an implied term principally on the basis of custom/usage² or business efficacy³.

The writing which evidences the security interest must describe the collateral. Collateral can be described in
a wide or narrow manner, for example:

- A narrow approach: specific items or classes of collateral can be listed in the security agreement, such as all the grantor’s motor vehicles, or accounts (book debts) 

- A wide approach: Alternatively, the security agreement can be more generic and provide that the security interest covers all the grantor’s present and after-acquired property (All-PAAP), or all the grantor’s present and after-acquired property except certain classes or items of collateral which are excluded⁴ (All-PAAP with exception).