CFO reported that a new proposal by the Financial Accounting Standards Board should eliminate the accounting allowances that made it easy for Lehman Brothers and MF Global to mislabel short-term loans, otherwise referred to as repurchase agreements, or “repos.”
The article said that in contrast to current practice, FASB’s new proposal would clarify that repo securities — agreements to exchange financial assets for cash and to buy back the asset at a later date –should be treated mainly as “borrowings,” not “sales” on corporate balance sheets.
To read the full CFO article click here.
To read FASB’s news release click here.
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