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FASB issues proposals on consolidated collateralized financing entity

  • FASB (US Financial Accounting Standards Board) Image

Jul 22, 2013

The FASB has issued a proposed Accounting Standards Update (ASU), which provides more specific guidelines for the accounting for the difference upon initial consolidation between the fair value of assets and liabilities of a collateralized financing entity.

The main provisions provided in this proposed ASU will “allow a reporting entity within the scope of this proposed Update to measure the financial liabilities of the collateralized financing entity on the basis of the fair value of the financial assets and the carrying value of any nonfinancial assets as described in the proposed amendments.”

Currently, IFRSs do not contain any guidance on collateralized financing entities.

The original comment deadline of the proposed ASU was September 17, 2013; the comment deadline has been extended to October 17, 2013.

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