Wiley GAAP 2019

63ASC 860 TRANSFERS AND SERVICING

PERSPECTIVE AND ISSUES

Subtopics

ASC 860 contains five subtopics: ASC 860-10, Overall

• ASC 860-20, Sales of Financial Assets
• ASC 860-30, Secured Borrowings and Collateral
• ASC 860-40, Transfers to Qualifying Special Purpose Entities
• ASC 860-50, Servicing Assets and Liabilities

Scope and Scope Exceptions

ASC 860 applies to transfers and servicing of noncash financial assets. A transfer includes:

• Selling a receivable,
• Transferring a receivable to a trust, or
• Using a receivable as security for a loan.

A transfer does not include:

• The origination of a receivable,
• The settlement of a receivable, or
• The restructuring of a receivable in a troubled debt restructuring.

  (ASC 860-20-20)

Those transactions are transfers involving the issuer of the receivable.

Among the types of transfers of financial assets for which ASC 860 establishes standards are:

• Financial instruments
• Financial assets
• Collateral
• Transfers of receivables with recourse (factoring with recourse)
• Transfers of undivided partial interests in receivables (retained interests)
• Transfers of receivables with servicing retained
• Transfers of lease receivables under sales-type and direct financing leases and any related guaranteed residual
• Putting a receivable into a securitization trust
• Repurchase agreements
• Dollar rolls
• Securities lending transactions
• Posting a receivable as collateral
• Banker’s acceptances

ASC 860-10-15-4 excludes the following items from the scope of ASC 860:

• Except ...