As debate continues over the role of fair-value measurement in the ongoing financial crisis, the Financial Accounting Standards Board is turning its attention to off-balance-sheet treatment of complex financial instruments, another accounting problem that played a supporting role in the meltdown.
The Board plans to revisit its proposal to revise Financial Accounting Standard No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, and Financial Interpretation No. 46R, Consolidation of Variable Interest Entities. The proposals generally eliminate the concept of a qualifying special purpose entity—the choice breeding ground for securitized assets built on mortgages now failing at ...