servicing revenues and costs

Assets1

1. 340-948Financial Services—Mortgage Banking340 Other Assets and Deferred Costs

   This Subtopic governs the accounting for the cost of issuing certain Government National Mortgage Association (GNMA) securities by mortgage banking entities. Issuers electing the internal reserve method must capitalize the one month's interest cost required to be paid to a trustee (340-948-25-1), subject to a ceiling equal to the present value of net future servicing income (340-948-30-1). The capitalized amount is then amortized in proportion to, and over the period of, estimated net servicing income (340-948-35-1).