Accountants monitoring last Wednesday's Financial Account -ing Standards Board meeting noted that FASB has tentatively "loosened" some of the hard-line provisions in the Exposure Draft of proposed amendments to FAS 140. The redeliberations will continue this Wednesday.

In summary, it appears FASB will limit the requirements for legal isolation in a QSPE to the transferor which is including the transfer of assets in its financial statements, and not to affiliates of the transferor under certain conditions (such as affiliates that may be involved in the transaction but are not included in the transferor's reporting statements).

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