Question

For the following researchable question, identify two additional questions that might arise as the researcher digs deeper into the research topic. Assume that a company has just sold a portfolio of mortgage loans in exchange for cash and certain retained interests in the loan’s receivable. The initial question: Can the company record the transfer as a sale? Cite the FASB Codification as your reference.

Answer 1

Yes , the transfer can be recorded as sale. As the mortgage loan is sold to get cash in return

                                 The Financial Accounting Standards Board (FASB) is an independent nonprofit organization that is responsible for establishing accounting and financial reporting standards for companies and nonprofit organizations in the United States, following generally accepted accounting principles (GAAP)

                          The Financial Accounting Standards Board has the authority to establish and interpret generally accepted accounting principles (GAAP) in the United States for public and private companies, as well as for nonprofit organizations. GAAP refers to a set of standards for how companies, nonprofits, and governments should prepare and present their financial statements, including any related party transactions.

1. The Financial Accounting Standards Board (FASB) sets accounting rules for public and private companies, as well as nonprofits, in the United States.

2. A related organization, the Governmental Accounting Standards Board (GASB), sets rules for state and local governments.

3. In recent years, the FASB has been working with the International Accounting Standards Board (IASB) to establish compatible standards worldwide.

The FASB is governed by seven full-time board members, who are required to sever their ties to the companies or organizations they worked for before joining the board. As a group, they are chosen to provide "knowledge of accounting, finance, business, accounting education, and research.”

The Financial Accounting Standards Board, or FASB, is the leading source of generally accepted accounting principles. The FASB is an independent rule-making agency and issues Statements of Financial Accounting Standards regarding financial reporting objectives, elements to be included in financial statements and desired characteristics of accounting information. The FASB maintains an Accounting Standards Codification, also called the ASC, which is frequently referenced by accountants, lawyers and students. It is updated periodically and contains topics, subtopics, sections and paragraphs that can be individually referenced using the proper citations.

                     The Board’s objective in issuing this Statement is to improve the relevance, representational faithfulness, and comparability of the information that a reporting entity provides in its financial statements about a transfer of financial assets; the effects of a transfer on its financial position, financial performance, and cash flows; and a transferor’s continuing involvement, if any, in transferred financial assets.