Tag Archives: ASC 860

Servicing Assets and Liabilities, ASC 860

Accounting for Servicing of Financial Assets
SFAS 156 amended SFAS 140 in March 2006
SFAS 140 replaced SFAS 125 in September 2000

SFAS 156, March 2006
“Accounting for Servicing of Financial Assets”
an amendment of FASB Statement No. 140

SFAS 140, September 2000
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”
a replacement of FASB Statement No. 125

SFAS 125, June 1996
” Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”

Amendments to SFAS 140 by SFAS 156 in March 2006
1. Initial measurement
Servicing Assets (SA) and Servicing Liabilities (SL) are
–> initially measured at fair value

2. Subsequent measurement
Before SFAS 156,
–> SA and SL are subsequently measured at amortized cost

SFAS 156 provides
–> a Fair Value Option for SA and SL

Entities have a choice of (A) or (B):
–> (A) Amortized cost
–> (B) Fair value

3. Separate presentation of SA and SL
–> subsequently measured at fair value

 

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Sale of Financial Assets, ASC 860

Accounting for Servicing of Financial Assets
SFAS 166 amended SFAS 140 in June 2009
SFAS 156 amended SFAS 140 in March 2006
SFAS 140 replaced SFAS 125 in September 2000

SFAS 166, June 2006
“Accounting for Transfers of Financial Assets”
an amendment o FASB Statement No. 140

SFAS 156, March 2006
“Accounting for Servicing of Financial Assets”
an amendment of FASB Statement No. 140

SFAS 140, September 2000
“Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”
a replacement of FASB Statement No. 125

SFAS 125, June 1996
” Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities”

Amendments to SFAS 140 by SFAS 166 in June 2009
1. The concept of Qualifying Special Purpose Entities (QSPE) was removed
–> Paragraphs 34 – 46 were deleted.

2. Financial components approach was modified

The application of sale accounting is limited to (A), (B), (C)
(A) transfer of an entire financial asset
(B) transfer of a group of entire financial assets
(C) transfer of a participating interest in an entire financial asset

Paragraph 8B of SFAS 140 defines the “participating interest”

3. The conditions to determine whether the control was surrendered
–> were amended for clarification
–> Paragraph 9 of SFAS 140

4. Additional disclosures
–> Paragraphs 16B – 16D were added

 

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