As the dog days of summer approach, securitization market players are facing some of the biggest accounting changes in years that will require major changes in relatively short order to their balance sheets, financial disclosures and the systems to generate that information.
The Financial Accounting Standards Board (FASB), based in Norwalk, Conn., published June 12 two standards affecting securitizations: Financial Accounting Statements (FAS) No. 166, Accounting for Transfers of Financial Assets, and FAS 167, Amendments to FASB Interpretation No. 46(R). Effective for first-quarter financial statements, firms must implement new disclosures and bring most securitizations onto their balance sheets, a move market participants fear could prompt regulators to impose more intensive capital requirements.