In response to questions surrounding the appropriate level of passiveness for QSPEs in FAS 140, the Financial Accounting Standards Board (FASB) told its staff members last week to consider completely removing the QSPE concept from FAS 140 as part of the project to amend that rule.

Overhauling FAS 140 is already a complex undertaking. It is meant to allow servicing companies to record serviced assets and liabilities at their fair value, rather than using the lower-of-cost-or-market accounting method. The question of how passive - or brain dead, as some market participants say - a QSPE is supposed to be under FAS 140. The question added another dimension of complexity to discussions about it. The FASB met again last Wednesday to iron out issues surrounding the QSPE concept.

Subscribe Now

Access to a full range of industry content, analysis and expert commentary.

30-Day Free Trial

No credit card required. Access coverage of the securitization marketplace, including breaking news updated throughout the day.