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FASB redeliberates repurchase agreements

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Oct 04, 2013

At this week’s Board meeting, the FASB redeliberated its January 2013 exposure draft, “Transfers and Servicing (Topic 860): Effective Control for Transfers With Forward Agreements to Repurchase Assets and Accounting for Repurchase Financings.” The Board made tentative decisions on disclosure requirements, substantially-the-same characteristics, and transition.

 

TopicTentative Decision Made
Disclosures requirements
  • To require information necessary to understand the nature of the transactions, the transferor’s continuing exposure to the transferred financial assets, and the presentation of the components of the transaction in the financial statements.
  • To not require information about the asset quality of certain transferred financial assets.
  • To define the scope as transactions that comprise a transfer of financial assets to a transferee and an agreement done in contemplation of the initial transfer with the same transferee that results in the transferor retaining substantially all of the exposure to the return of the transferred financial asset throughout the term of the transaction.
Substantially-the-same characteristics To clarify the assessment of the substantially-the-same characteristics within effective control for dollar roll transactions.
Transition To use the cumulative-effect approach for all changes in accounting.

For more information on the tentative decisions reached during this meeting, please see:

Correction list for hyphenation

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