ASC

ASC 860-40

Transfers to Qualifying Special Purpose Entities

860 Transfers and Servicing

Download JSONDownload Markdown11 paragraphs · 8 sectionsJump to summary

Source downloaded: .Record version 81efbbb3a834. Effective date must be checked in the source.

In brief

IntermediateDerecognitionFinancial instrumentsConsolidationTransition and effective dates

ASC 860-40 formerly governed transfers of financial assets to qualifying special-purpose entities (QSPEs), which under pre-2010 GAAP were exempt from consolidation and could support sale accounting for the transferor. Every substantive paragraph in the subtopic (Sections 05, 10, 15, 25, 40, 45 and 55) was superseded by ASU 2009-16 (formerly FAS 166), which eliminated the QSPE concept entirely. The subtopic is now an empty shell retained only for reference; transfers to securitization entities are analyzed under the general derecognition conditions of ASC 860-10 and the consolidation guidance in ASC 810.

Key points (5)
  • All guidance in this subtopic (860-40-05-1 through 05-6, 10-1, 15-1 through 15-29, 25-1 through 25-3, 40-1 through 40-11, 45-1 through 45-4, and 55-1 through 55-29) was superseded by Accounting Standards Update No. 2009-16.
  • ASU 2009-16 removed the concept of a qualifying special-purpose entity, so an entity can no longer rely on QSPE status to avoid consolidation or to achieve sale accounting.
  • Because the QSPE scope-exception was eliminated, transfers to securitization vehicles must satisfy the general surrender-of-control conditions in ASC 860-10-40 (including legal isolation, the transferee's ability to pledge or exchange, and no effective control by the transferor).
  • Whether the transferee securitization entity must be consolidated is now determined under ASC 810-10, including the variable interest entity model as amended by ASU 2009-17.
  • No recognition, measurement, derecognition, presentation, or disclosure requirements remain in ASC 860-40; the subtopic number is retained solely to preserve the Codification's structure.

For students. Exam-relevant point: the QSPE is dead GAAP — post-2009 you never get automatic off-balance-sheet treatment for a securitization vehicle. The common mistake is citing old FAS 140/QSPE rules (or this subtopic) as live authority instead of applying ASC 860-10's control-based derecognition test together with ASC 810-10's VIE consolidation analysis.

qualifying special-purpose entitysuperseded guidancetransfers of financial assetssale accountingsecuritizationsurrender of controlvariable interest entityconsolidation scope exception

Machine-generated study aid for ASC 860-40. Check the source paragraphs below.

860-40-00Status

Source downloaded: .Record version 3cf5330f486d. Effective date must be checked in the source.

860-40-00-1
The following table identifies the changes made to this Subtopic.
Paragraph Action Accounting Standards Update Date
Affiliate Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Agent Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Beneficial Interests Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Commingling Superseded Accounting Standards Update No. 2009-16 12/23/2009
Condominium Structure Superseded Accounting Standards Update No. 2009-16 12/23/2009
Consolidated Affiliate Superseded Accounting Standards Update No. 2009-16 12/23/2009
Consolidated Affiliate of the Transferor Amended Accounting Standards Update No. 2009-16 12/23/2009
Derivative Financial Instrument Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Embedded Call Option Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Financial Asset Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Guaranteed Mortgage Securitization Superseded Accounting Standards Update No. 2009-16 12/23/2009
Qualifying Special-Purpose Entity Superseded Accounting Standards Update No. 2009-16 12/23/2009
Securitization Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Transfer Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Transferee Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Transferor Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
Unilateral Ability Removed from Subtopic Accounting Standards Update No. 2009-16 12/23/2009
860-40-05-1 through 05-4 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-05-6 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-10-1 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-15-1 through 15-29 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-25-1 through 25-3 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-40-1 through 40-11 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-45-1 through 45-4 Superseded Accounting Standards Update No. 2009-16 12/23/2009
860-40-55-1 through 55-29 Superseded Accounting Standards Update No. 2009-16 12/23/2009

860-40-05Overview and Background

Source downloaded: .Record version f869efa92802. Effective date must be checked in the source.

860-40-10Objectives

Source downloaded: .Record version 7133ec43c7e1. Effective date must be checked in the source.

860-40-15Scope and Scope Exceptions

Source downloaded: .Record version d4c5ce055a55. Effective date must be checked in the source.

860-40-25Recognition

Source downloaded: .Record version 99bb292a833b. Effective date must be checked in the source.

860-40-40Derecognition

Source downloaded: .Record version 4229ba4f93f7. Effective date must be checked in the source.

860-40-45Other Presentation Matters

Source downloaded: .Record version 6762abd11f97. Effective date must be checked in the source.

860-40-55Implementation Guidance and Illustrations

Source downloaded: .Record version 3f7a82734098. Effective date must be checked in the source.

Related subtopics