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FASB issues guidance on repurchase agreements

  • FASB (US Financial Accounting Standards Board) Image

Jun 12, 2014

The FASB has issued ASU 2014-11,* which modifies the guidance in ASC 860 on the financial reporting of repurchase agreements (“repos”) and other similar transactions. The ASU requires entities to account for repurchase-to-maturity transactions as secured borrowings.

According to the FASB’s press release, the new guidance “eliminates sale accounting for repurchase-to-maturity transactions and supersedes the guidance under which a transfer of a financial asset and a contemporaneous repurchase financing could be accounted for on a combined basis as a forward agree.”

Further, the ASU “requires a new disclosure for transactions economically similar to repurchase agreements in which the transferor retains substantially all of the exposure to the economic return on the transferred financial assets throughout the term of the transaction. The Update also requires expanded disclosures about the nature of collateral pledged in repurchase agreements and similar transactions accounted for as secured borrowings.”

For more information, see the FASB’s press release, ASU, FASB in Focus, and video podcast.


* FASB Accounting Standards Update No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.

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