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Statement No. 77 Reporting by Transferors for Transfers of Receivables with Recourse STATUS Issue Date: December 1983 Effective Date: For transfers of receivables with recourse entered into after December 31, 1983 Affects: Amends FAS 13, paragraph 20 Amends FAS 32, Appendix A Affected by: Paragraph 9 amended by FAS 105 Superseded by FAS 125 Other Interpretive Pronouncement: FTB 85-2 (Superseded by FAS 125) Note: Although superseded, this pronouncement is still applicable until the effective date of FAS 125. Issues Discussed by FASB Emerging Issues Task Force (EITF) Affects: No EITF Issues Interpreted by: Paragraph 5 interpreted by EITF Issues No. 86-24, 88-22, 89-2, 90-18, and 92-2 Paragraph 6 interpreted by EITF Isue No. 92-2 Paragraph 7 interpreted by EITF Topic No. D-13 Related Issues: EITF Issues No. 84-5, 85-25, 85-30, 85-40, 86-8, 87-25, 87-30, 88-25, and 89-4 Abbreviations for Accounting Pronouncements FAS - FASB Statements FIN - FASB Interpretations FTB - FASB Technical Bulletins APB - APB Opinions AIN - AICPA Interpretations ARB - Accounting Research Bulletins CON - FASB ConceptsEITF - EITF Issues Q&A - FASB Implementation Guides SUMMARY This Statement specifies that a transferor ordinarily should report a sale of receivables with recourse transaction as a sale if (a) the transferor surrenders its control of the future economic benefits relating to the receivables, (b) the transferor can reasonably estimate its obligation under the recourse provisions, and (c) the transferee cannot return the receivables to the transferor except pursuant to the recourse provisions. If those conditions do not exist, the amount of proceeds from the transfer should be reported as a liability. This Statement is effective for transfers made after December 31, 1983, including those made pursuant to earlier agreements. It amends a minor provision of FASB Statement No. 13, Accounting for Leases. This project was undertaken in response to an Issues Paper prepared by the AICPA and in considering an AICPA Statement of Position, both of which addressed transfers of receivables with recourse. The conclusions of this Statement differ from those reached by the AICPA. It is not expected to change predominant practice generally except that gain or loss on a transfer will be recognized when a transfer is made rather than over the period the receivables remain outstanding. Copyright by Financial Accounting Standards Board. All Rights Reserved. Used by Permission.
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