With the Financial Accounting Standards Board’s recent publication of standards No. 166, Accounting for Transfers of Financial Assets, and No. 167, Amendments to FASB Interpretation No. 46(R), the end of the qualified special purpose entity is, thankfully, close at hand. We should all celebrate.
QSPEs, as these vehicles are known, have always been troublesome accounting creatures that let companies push some financial assets off the balance sheet despite the fact that they retained effective control over those assets. QSPEs helped encourage the securitization transactions that seriously hurt many financial institutions in the last two years. FAS 166 and 167 are intended ...