Open AccessFinancial Reporting Differences Under SFAS 125
Author(s) -
Anthony F. Cocco,
Tommy Moores
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v15i3.5672
Subject(s) - accounting , financial statement , business , income statement , differential (mechanical device) , finance , span (engineering) , actuarial science , balance sheet , engineering , audit , aerospace engineering , civil engineering
SFAS 125 was fully effective after December 31, 1997. The main issues covered by the standard are transfers and servicing of financial assets and recognition of liabilities. This article focuses on the differential financial statement effects and ratio impact of recording transfers as sales versus as secured borrowings. An example illustrates the income and ratio manipulation possibilities afforded by the standard.