Now that the Financial Accounting Standards Board has decided to no longer permit qualified status for special purpose entities, it is moving on to consideration of the other proposed amendments that had been included in Exposure Draft (ED) No. 1225-001, Accounting for Transfers of Financial Assets: An Amendment of FASB Statement No. 140.

The topic is the only official order of business for the Board's May 21, 2008, weekly meeting at its Norwalk, CT, headquarters.

The Board plans to look at the measurement of interests that continue to be held by the transferor, and whether it needs to be amended from the existing Statement of Financial Accounting Standards (SFAS) No. 140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilitiesa Replacement of FASB Statement No. 125. There have been heated exchanges as to how to measure interests held by the transferor, such as a bank selling securitized assets, as well as those interests now held by the transferee, especially in the aftermath of the sub-prime mortgage crisis.

In 2007, the Securities and Exchange Commission encouraged the FASB to allow SFAS No. 140 to be interpreted so that mortgage originators, or transferors, could modify the terms of loans without violating the terms of the securitizations.