Preface
We are pleased to present the 2024
edition of Transfers and Servicing of Financial Assets, which provides an
overview of the FASB’s authoritative guidance, as well as our insights and
interpretations, on (1) the transferor’s and transferee’s accounting for a transfer
of financial assets or servicing rights and (2) the servicer’s accounting for a
right or obligation to service financial assets.
It can be time-consuming and complex to appropriately
account for a transfer of financial assets or servicing rights because of the need
to consider both legal and accounting rules and interpretations. To properly apply
U.S. GAAP to such a transaction, an entity must closely analyze the transaction’s
terms and conditions as well as the related facts and circumstances. As part of such
an analysis, an entity must generally consult legal experts to determine whether a
transfer of financial assets represents a sale under relevant law. The outcome of
the analysis could significantly affect the classification, measurement, and
earnings impact of the transaction as well as the related financial statement
ratios.
No significant updates were made to
the 2024 edition of this Roadmap, other than minor clarifications and the removal of
discussions related to guidance that was superseded upon the adoption of ASC 842.1 These revisions are highlighted in Appendix D.
Be sure to check out On the Radar (also available
as a stand-alone
publication), which briefly summarizes
emerging issues and trends related to the accounting and
financial reporting topics addressed in the Roadmap.
We hope you find this Roadmap a
useful resource in applying the guidance, and we welcome your suggestions for future
improvements. If you need assistance with applying the guidance on transfers and
servicing of financial assets or have other questions about this topic, we encourage
you to consult our technical specialists and other professional advisers.
Footnotes
1
For a list of abbreviations used in this publication, see
Appendix C.
For the full titles of standards, topics, and regulations used in this
publication, see Appendix
B.