The hairsplitting points of Emerging Issues Task Force (EITF) 03-1 remain murky, and market participants gathered at the American Securitization Forum Sunset Seminar in New York were hoping for a brief reprieve. The rule, as originally released, is slated to take effect later this week, but there have been new developments.
Earlier this month, the Financial Accounting Standards Board (FASB) proposed to postpone the implementation of the effective date for paragraph 16 of EITF 03-1, which addresses most debt securities that are underwater solely because of an increase in interest rates. Two FASB Staff Position (FSP) were released seeking comment on the issue. Comments for the FSP proposing to defer portions of EITF 03-1 are due by Sept. 29, and comments on the proposed FSP providing clarifying guidance for parts of EITF 03-1 are due Oct. 29.