Accounting

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Edita Mercado
Su Jane
Acct 301
FASB Codification Assignment
3/13/2013
Professional Research: FASB Codification
A. Identify relevant Codification section that addresses transfers of receivables. The relevant codification section that addresses transfers of receivables is the following: FASB ASC 860-10-05-15. C. Provide definitions for the following:

1) Transfer:
The conveyance of a noncash financial asset by and to someone other than the issuer of that financial asset. A transfer includes the following: selling a receivable, putting a receivable into securitization trust, and posting a receivable as collateral. A transfer excludes the following: the origination of the receivable, settlement of a receivable, and the restructuring of a receivable into a security in a troubled debt restructuring. (FASB ASC 860-10-20)

2) 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. (FASB ASC 860-10-20) 3) Collateral: “Personal or real property in which a security interest has been given” (FASB ASC 860-10-20). 4) Transferee: “An entity that receives a financial asset, an interest in a financial asset, or a group of financial assets from a transferor” (FASB ASC 860-10-20). 5) Transferor: “An entity that transfers a financial asset, an interest in a financial asset, or a group of financial assets that it controls to another entity” (FASB ASC 860-10-20). 6) Factoring:

Factoring arrangements are a means of discounting accounts receivable on nonrecourse, notification basis. Accounts receivables in their entireties are sold outright, usually to a transferee (the factor) that assumes the full risk of a collection, without recourse to the transferor in the event of loss. Debtors...
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