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Transfers and servicing: Repurchase agreements and similar transactions

The objectives of this project are to (1) improve the existing accounting and disclosure guidance on repurchase agreements and other transactions involving a transfer and a forward agreement to repurchase the transferred assets at a fixed price from the transferee, (2) address application issues and changes in the marketplace, and (3) ensure that investors obtain useful information about these transactions.

 

Meeting minutes

FASB discussions regarding this project are found in the following meeting minutes:

  • March 12, 2014 — The Board made tentative decisions on: (1) disclosures related to the quality of the transferred financial assets in repurchase agreements, securities lending transactions, and repurchase-to-maturity transactions that are accounted for as secured borrowings and (2) the effective date of such disclosures.
  • December 18, 2013 — The Board discussed the feedback received from limited outreach meetings.
  • October 2, 2013 — The Board discussed its tentative decisions, accounting for repurchase financing, the substantially-the-same characteristics for effective control, a disclosure package, and transition.
  • May 23, 2013 — The Board discussed feedback received from comment letters on its proposed Accounting Standards Update (ASU) and the next steps for the project.
  • December 12, 2012 — The Board decided that a transfer of a held-to-maturity debt security in a repurchase-to-maturity agreement accounted for as a secured borrowing would not contradict the transferor’s stated intent to hold the security to maturity and, therefore, would not call into question the transferor’s intent to hold other debt securities to maturity.
  • November 7, 2012 — The Board discussed the transition methods for the proposed ASU and decided on a cumulative-effect approach for repo-to-maturity transactions and repurchase financings involving a repo-to-maturity.
  • October 3, 2012 —  The Board decided to eliminate the current accounting requirements for repurchase financings in ASC 860, Transfers and Servicing, and instead decided that a repurchase agreement or similar transaction would always be accounted for as a secured borrowing if it met six specific characteristics.
  • September 5, 2012 — The Board discussed new disclosures that would be required for repurchase agreements and similar transactions in light of decisions reached to date in this project, particularly disclosure for certain repurchase agreements and other transfers with forward agreements to repurchase transferred assets.
  • August 1, 2012 — The Board discussed issues relating to the  development of an ASU addressing accounting for repurchase agreements that involve similar but not identical financial assets and agreements that do not meet the criteria for secured borrowing accounting.
  • June 27, 2012 — The Board discussed issues relating to the  development of an ASU addressing the accounting for repurchase agreements involving identical financial assets.
  • March 21, 2012 — The Board added the new project to its agenda related to the accounting and disclosure requirements for repurchase agreements and similar transactions and to reexamine the guidance in ASC 860, that is specific to the assessment of effective control for repurchase agreements and similar transactions.

 

Current status

On June 12, 2014, the FASB issued a final ASU that 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.

 

Project milestones

DateDevelopmentsComments
March 21, 2012 Added to the FASB's agenda.
January 15, 2013 Proposed ASU, Transfers and Servicing (Topic 860) — Effective Control for Transfers with Forward Agreements to Repurchase Assets and Accounting for Repurchase Financings. Comment deadline March 29, 2013.
June 12, 2014 FASB Accounting Standards Update No. 2014-11, Transfers and Servicing (Topic 860): Repurchase-to-Maturity Transactions, Repurchase Financings, and Disclosures.

 

 

 

Correction list for hyphenation

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