The Financial Accounting Standards Board (FASB) issued new rules last week to update how companies account for repurchase agreements like the kind Lehman Brothers used to temporarily move billion of dollars of assets temporarily off its books and hide how much debt it had just before reporting its quarterly results.

The new rules are aimed at improving the accounting for repos by removing from the assessment of effective control the requirement that the transferor have the ability to repurchase or redeem the financial assets, as well as implementation guidance related to that criterion. “The new guidance improves transparency by eliminating consideration of the transferor’s ability to fulfill its contractual rights and obligations from the criteria in determining effective control,” said Leslie Siedman, chairman of the FASB.

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