- Under Canadian GAAP, entities accounting for their investment in retained in-
terests as a long term investment would record a write down of the interest if
there is “other than temporary” impairment. This approach appears to be more
prevalent in Canada. If accounted for as a loan, entities would review the crite-
ria in Section 3025 when assessing impairment. The amount of any write down
would be measured by discounting the expected future cash flows at the effec-
tive interest rate inherent in the retained interest.
SOURCES AND SUGGESTED REFERENCES
“European Securitisation Issuance Soars to Another Record in 2001.” European Securitisation
Forum, The Bond Market Association, March 1, 2002.
Corrigan, Colleen. “Can ABS Kickstart Japanese Market?”Asset Securitization Report.
Thomson Financial, May 13, 2002.
EITF Issue No. 88-18. “Sale of Future Revenues.”
EITF Issue No. 99-20. “Recognition of Interest Income and Impairment on Purchased and Re-
tained Beneficial Interests in Securitized Financial Assets.”
Ernst & Young Financial Reporting Developments FASB Statement No. 140, “Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities.”
FASB. Consolidation of Certain Special-Purpose Entities—an interpretation of ARB No. 51
(Exposure Draft—Proposed Interpretation).
FASB Statement No. 140, “Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities.”
“Latin America: A Rough 2001, but a Solid Year in Issuance.”Asset Securitization Report.
Thomson Financial, January 7, 2002.
APPENDIX
This Appendix provides an example of the gain-on sale calculation and subsequent
accounting sections.
21 • 26 ASSET SECURITIZATION