Last week's article on EITF 99-20 elicited responses from the accounting community.

According to Marty Rosenblatt of Deloitte & Touche, it needs to be clear that EITF 99-20 is related to all interest-only and credit-sensitive MBS, ABS and CDOs, not just residuals. EITF 89-4 only applied to IOs, and, contrary to what was reported, 89-4 also called for a prospective method of interest income recognition. As for the impairment clause - where an asset is considered impaired when the internal rate of return calculated is less than the risk-free rate - previous guidance only applied to IOs. For other assets, it was left to subjective judgement.

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