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for Guarantees, Including Indirect Guarantees of Indebtedness of Others SEC Staff Accounting Bulletin No. 30, Accounting for Divestiture of a Subsidiary

By Or Other Business Operation

Abstract

Force reached a consensus that income should not be recognized immediately as a result of the sale of mortgage servicing rights with a subservicing agreement. However, the Task Force agreed that a loss should be recognized currently if the transferor determines that prepayments of the underlying mortgage loans may result in performing the future servicing at a loss. The Task Force did not address whether the transaction should be accounted for as a financing or as a sale with the gain deferred. This Issue addresses whether the transaction described in Issue 87-34 should be accounted for as a financing or as a sale with the gain deferred. EITF DISCUSSION Copyright © 2006, Financial Accounting Standards Board Not for redistribution Page 1The Task Force reached a consensus that a sale of mortgage servicing rights with a subservicing agreement should be treated as a sale with gain deferred if substantially all the risks and rewards inherent in owning the mortgage servicing rights have been effectively transferred to the buyer. The risks and rewards associated with a seller performing purely administrative functions under

Year: 1990
OAI identifier: oai:CiteSeerX.psu:10.1.1.353.2528
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