The Financial Accounting Standards Board issued a revised exposure draft, titled, "Accounting for Transfers of Financial Assets."
The statement seeks to clarify derecognition requirements for financial assets that were initially explained in FASB Statement No. 125, "Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities," and revised in Statement 140. The exposure draft also seeks to simplify the initial measurement of interests related to transferred financial assets, changes principally applying to securitizations and loan participations.
The board also issued two additional exposure drafts, "Accounting for Servicing of Financial Assets," and, "Accounting for Certain Hybrid Financial Instruments." Both provide optional accounting treatments that would simplify accounting in the complex areas.
"Today's proposed changes are intended to address some application issues that have arisen and to provide opportunities to simplify some of the accounting and eliminate part of the mixed attribute problems that create accounting volatility," said FASB board member Edward W. Trott, in a statement. All three exposure drafts, and information on how to submit comments, are available on the FASB's Web site at www.fasb.org. The comment deadline is Oct. 10.
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