Accounting developments for special purpose entities

Structured finance ()

The IASB (the International Accounting Standards Board) issued various new standards in May 2011, two of which are of particular relevance to those involved in securitisation and structured finance.

IFRS 10 (Consolidated Financial Statements) introduces new rules which will impact which party, if any, consolidates a special purpose entity (SPE) created as part of a structured finance transaction.

IFRS 12 (Disclosure of Interests in Other Entities) is designed to enhance the financial statement disclosures that banks and other parties make concerning their involvement in other entities, particularly unconsolidated SPEs. It is uncertain at this stage how some of the provisions of IFRS 10 will be interpreted, but we provide below some first impressions of the potential impact of the two new standards on those involved in structured finance.

Previous issues of Structured finance publications

Aug 2012 Global structured finance group
Jul 2012 Accounting developments
Jul 2012 Special purpose entities consolidation and disclosure
Jun 2012 Securitisation after the credit crunch
Jun 2012 Accounting developments for special purpose entities
Jun 2012 Securitisation services to CLOs and CDOs
Jun 2012 Securitisation achieving tax neutrality
Jun 2012 Securitisation financial reporting avoiding the common pitfalls
Jun 2012 Securitisation new due diligence challenges
Jun 2012 Securitisation working with arrangers and managers
Jun 2012 Securitisation working with originators
Jun 2012 Structured credit and derivative transaction reviews