Accountants are pointing at a call option provision of the Financial Accounting Standard 140 (FAS 140)- which will become effective March 31, 2001 - to have a significant impact on securitization-related accounting.

The provision, which was interpreted in a preliminary draft of a FAS 140 implementation guide, states that only the callable portion, or callable percentage of a securitized portfolio, will fail sale treatment criteria, as opposed to the entire securitized portfolio, no matter how substantial the callable percentage.

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