ASU 2011-03

The main objective in developing this Update is to improve the accounting for repurchase agreements (repos) and other agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The Board continuously monitors capital markets for reports of significant accounting or financial reporting issues to assess whether standard- setting actions are required. During the global economic crisis, capital market participants questioned the necessity and usefulness of the collateral maintenance guidance for the transferor’s ability criterion (described below) when determining whether a repo should be accounted for as a sale or as a secured borrowing.