FASB Closes Repo-to-Maturity Loophole (New Standard Requires Repos-to-Maturity to be Treated as Secured Borrowings) - Fitch Research

FASB Closes Repo-to-Maturity Loophole (New Standard Requires Repos-to-Maturity to be Treated as Secured Borrowings)

FASB Closes Repo-to-Maturity Loophole (New Standard Requires Repos-to-Maturity to be Treated as Secured Borrowings) - Fitch Research
FASB Closes Repo-to-Maturity Loophole (New Standard Requires Repos-to-Maturity to be Treated as Secured Borrowings)
Published Jun 23, 2014
5 pages (2977 words) — Published Jun 23, 2014
Price US$ 999.00  |  Buy this Report Now

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Brief Excerpt:

...Standard Limits Repo-to-Maturity: A new U.S. accounting standard update, ASU 2014-11, changes accounting recognition for repo-to-maturity (RTM) and repo financing transactions. Previously these transactions could be accounted for as sales, unlike most other repos. RTMs and repo financings will now be treated as secured borrowings and remain on balance sheet. The underlying assets could previously be removed from the transferor's balance sheet and a profit, or loss, recognized on disposal. The rules take effect for periods beginning after Dec. 15, 2014. Effect minimal: Fitch Ratings expects the new standard to result in few balance sheet adjustments as RTM transactions have been less popular in recent periods. Nevertheless, the new rules should bring greater consistency for those RTMs and repo financings that remain. Accounting Understated Leverage and Risks: The update closes an accounting loophole that led to risks being obscured off-balance sheet. With underlying assets removed from the...

  
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Cite this Report

  
MLA:
Fitch Research. "FASB Closes Repo-to-Maturity Loophole (New Standard Requires Repos-to-Maturity to be Treated as Secured Borrowings)" Jun 23, 2014. Alacra Store. May 14, 2025. <http://www.alacrastore.com/fitch-credit-research/FASB-Closes-Repo-to-Maturity-Loophole-New-Standard-Requires-Repos-to-Maturity-to-be-Treated-as-Secured-Borrowings-746738_report_frame>
  
APA:
Fitch Research. (). FASB Closes Repo-to-Maturity Loophole (New Standard Requires Repos-to-Maturity to be Treated as Secured Borrowings) Jun 23, 2014. New York, NY: Alacra Store. Retrieved May 14, 2025 from <http://www.alacrastore.com/fitch-credit-research/FASB-Closes-Repo-to-Maturity-Loophole-New-Standard-Requires-Repos-to-Maturity-to-be-Treated-as-Secured-Borrowings-746738_report_frame>
  
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