FASB Incorporates FAS 166, 167 in Codification

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NORWALK, Conn.—The Financial Accounting Standards Board Dec.23 announced it was incorporating its new standards on consolidation of variable interest entities (VIE)  and transfers of financial assets into the Accounting Standards Codification.

Specifically, FASB issued Accounting Standards Update 2009-17, Consolidations (Topic 810), Improvements to Financial Reporting by Enterprises Involved with Variable Interest Entities. The ASU amends the accounting guidance resulting from FASB Statement 167, Amendments to FASB Interpretation 46(R), which was issued June 12 (5 APPR 573, 6/26/09).

FASB also issued ASU  2009-16, Transfers and Servicing (Topic 860), Accounting for Transfers of Financial Assets.  This amends accounting guidance resulting from FASB Statement 166, Accounting for Transfers of Financial Assets, also issued June 12.

The two rules take effect at the start of a company’s first fiscal year beginning after Nov. 15, 2009, or January 1, 2010 for companies reporting earnings on a calendar-year basis. Due to the accounting rule changes under FAS 166 and 167, banks have to bring certain off balance sheet assets back onto their balance sheets starting in 2010.