U.S. GAAP, Codification of Accounting Standards, ASC - Accounting Standards Codification by FASB

U.S. GAAP Codification of Accounting Standards

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Accounting Standards, ASC

U.S. GAAP Codification of Accounting Standards
Codification Topic 860-50: Servicing Assets and Liabilities

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Codification Topic 860-50
Servicing Assets and Liabilities

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

International Financial Reporting Standards (IFRS)

IAS 39: Financial instruments: recognition and measurement

Codification Topic 860
Transfers and Servicing

Subtopics of Codification Topic 860

   860-10 Overall
   860-20 Sales of Financial Assets
   860-30 Secured borrowing and collateral
   860-40 Transfers to qualifying special purpose entities
   860-50 Servicing assets and liabilities

Accounting Terms of Codification Topic 860-10

   Affiliate
   Agent
   Attached call option
   Beneficial interests
   Cleanup call option
   Collateral
   Consolidated affiliate
   Consolidated affiliate of the transfer
   Continuing involvement
   Controlled amortization method
   Derecognize
   Dollar-roll repurchase agreement
   Embedded call option
   Equitable right of redemption
   Financial Asset
   Financial liability
   Fixed participation method
   Floating participation method
   Freestanding call option
   Government national mortgage association rolls
   Liquidation
   Loan participation
   Loan syndication
   Nonpublic entity
   Preset participation method
   Publicly traded entity
   Qualifying special-purpose entity
   Recourse
   Repurchase agreement
   Repurchase financing
   Revolving-period securitizations
   Securitization
   Seller
   Transfer
   Transferee
   Transferor
   Undivided interest
   Unilateral ability

Accounting Terms of Codification Topic 860-20

   Derivative financial instrument
   Financial instrument
   Interest-only strip
   Proceeds
   Security

Accounting Terms of Codification Topic 860-30

Security interest

Accounting Terms of Codification Topic 860-40

   Commingling
   Condominium structure
   Guaranteed mortgage securitization

Accounting Terms of Codification Topic 860-50

   Adequate compensation
   Benefits of servicing
   Contractually specified servicing fees
   Protection provisions
   Servicing assets
   Servicing liabilities