FASB proposes ASU to improve the accounting for repurchase agreements
03 Nov 2010
The FASB has released Proposed Accounting Standards Update, Transfers and Servicing (Topic 860): Reconsideration of Effective Control for Repurchase Agreements.
The amendments in the proposed ASU "would remove from the assessment of effective control the criterion relating to the transferor's ability to repurchase or redeem financial assets on substantially the agreed terms, even in the event of default by the transferee." If finalized, this proposal would improve convergence with IFRSs, which do not contain a requirement to consider a transferor's ability to repurchase or redeem financial assets transferred on substantially agreed terms.
Comments on the proposed ASU are due by 15 January 2011.
Click for:
- Proposed ASU — Transfers and Servicing (Topic 860) - Reconsideration of Effective Control for Repurchase Agreements
- More information on the proposed ASU, see Heads Up Repo 101: FASB Gets Back to Basics on Repurchase Accounting (PDF 114k), published by Deloitte (United States).
