With six Q&A sessions already dedicated to discussing the nature of its implementation guidelines, International Accounting Standards (IAS) 39 is beginning to stir up much hesitation over how it may potentially change the allure of future European securitizations.

Designed to establish the fundamentals for recognizing, measuring and disclosing information about financial liabilities, IAS 39 addresses the issue of control over transferred assets. According to panelists at the recent Barcelona ABS conference, the rule declares that if the transferor of assets to an SPV is considered to control those assets, then the SPV would have to be consolidated on the balance sheet of the issuer.

For those following the issue closely, such a decree could potentially dim the most alluring aspect of securitizations. "So far it is not clear how it specifically addresses SPVs or how it will be interpreted. We are reviewing its implications but can not draw any substantive conclusions yet," said S&P analyst Apea Koranteng.

Still, such implementations have consistently been under review since the rule was approved in early January and one source following the situation said the rule is ultimately going to be coordinating with Financial Accounting Standards Board.

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