Accounting Project

Jason nguyen

Professor Neel

ACCT 3367

April 26, 2015

Financial Accounting Standards Codification Research Assignment

1. Transfer of Receivables FASC 860-10

As the new staff person in your company's treasury department, you have been asked to conduct research related to a proposed transfer of receivables. Your supervisor wants the authoritative sources for the following items that are discussed in the securitization agreement. |

a) Identify relevant Codification section that addresses transfers of receivables.

The relevant codification section that addresses transfers of receivables is the following: FASC 860-10-05-15.

b) Provide definitions for the following:

i. Transfer: The transfer of a noncash financial asset by and to someone other than the issuer of that financial asset. (FASC 860-10-20)

ii. Recourse: the right of a transferee of receivables to receive payment from the transferor of those receivables for any of the following: failure of debtors to pay when due, the effects of prepayments and adjustments resulting from defects in eligibility of the transferred receivables. (FASC 860-30-20)

iii. Collateral: Personal or real property that a borrower has pledged as security for a loan. (FASC 860-30-20)

c) Provide other examples (besides recourse and collateral) that qualify as continuing involvement.

FASC 860-10-05-4

• Servicing arrangements

• Agreements to purchase or redeem transferred financial assets

• Options written or held

• Derivative instruments that are entered into contemporaneously with, or in contemplation of, the transfer

• Arrangements to provide financial support

• The transferor’s beneficial interests in the transferred financial assets

2. Inventories FASC 330-10

Jones Co. is in a technology-intensive industry. Recently, one of its competitors introduced a new product with technology that might render obsolete some of Jones's inventory. The accounting staff wants to follow the...