According to a brief summary by Ernst & Young concerning yesterday's FASB roundtable discussion on the proposed amendment to FAS 140, FASB did not intend to inhibit vanilla master trust structures from meeting the criteria for QSPE status.

This was one of the primary concerns expressed in comment letters sent to the Board on the 140 amendment Exposure Draft. The Board will begin redeliberating on the Exposure Draft on Wednesday, Sept. 3. Among other issues, FASB will try to better define "beneficial interest reissuances," E&Y said in its On Call Advisory Services Accounting Alert.

The following is a direct citation from E&Y’s comments:  

While FASB will try to define beneficial interest reissuances, it does not appear issuance of new master trust series will be considered reissuances if the proceeds are used to reduce the transferor’s interest or to fund new asset transfers. It appears new series will be considered reissuances if proceeds are used to retire third party beneficial interests.  It appears it will be acceptable for transfers to commit to add future receivables from specified accounts to QSPE master trusts and to maintain a minimum level of QSPE master trust receivables.

To view the entire document, which addresses several other issues discussed at yesterday’s meeting, click E&Y on FAS140.

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