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STANDARDS TRACKER |
STANDARDS TRACKER
FASB new project: participating interest guidance under ASC 860 (transfers and servicing)
FASB opened a technical project on participating interest guidance - no rule yet, but the sale-vs.-secured-borrowing question is back on the agenda.
At its Sept. 16, 2026, board meeting, the FASB added a project to its technical agenda on ASC Topic 860, Transfers and Servicing, according to the Crowe October 2026 Financial Reporting briefing. The scope is to identify and address diversity in practice in how entities apply the participating interest guidance - the framework that determines whether a partial financial asset transfer qualifies as a sale or must be recorded as a secured borrowing.
BY THE NUMBERS
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See below EFFECTIVE |
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Oct 22 LAST UPDATED |
FASB ISSUER |
The FASB has not yet proposed specific amendments, and the addition of the project does not change current GAAP, the Crowe briefing states. The board also decided the project will not cover securities-for-securities lending arrangements, keeping that topic off the table for now.
The project is most directly relevant to banks and other financial institutions that originate, sell, or purchase participations in loans and other financial assets, per the Crowe briefing. The sale-vs.-secured-borrowing distinction has balance sheet, income statement, and regulatory capital implications, so any eventual amendments could require changes to accounting policies, systems, and disclosures.
No timeline for an exposure draft or final standard has been stated in available sources. The FASB's Sept. 16, 2026, meeting was the agenda-addition decision; substantive deliberations have not yet been reported. Close teams at affected institutions should monitor FASB tentative board decisions for the next phase.
WHAT TO DO IN THE CLOSE
| Flag the new FASB ASC 860 project for your accounting policy log and assign an owner to monitor FASB board meeting summaries. | |
| Inventory all loan participation agreements and note which transfers are recorded as sales vs. secured borrowings under current participating interest criteria. | |
| Brief your audit committee that a FASB project on this topic is open; no amendments are proposed yet and current GAAP stands. | |
| Review existing disclosures on transfers of financial assets to confirm they accurately describe current accounting treatment before any rule change. | |
| Watch for an exposure draft and set up a comment-letter process if your institution originates or purchases significant loan participations. |
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QUESTIONS THIS ANSWERS
Does the FASB project change how we account for loan participations today?
No. The Crowe October 2026 briefing states the FASB has not yet proposed specific amendments and the addition of the project does not change current GAAP. Existing participating interest guidance in ASC 860 remains in effect.
What is a participating interest under ASC 860?
A participating interest is a pro-rata ownership interest in an entire financial asset that meets specific criteria in ASC 860-10-40-6A. A transfer that fails those criteria cannot be reported as a sale and must be recorded as a secured borrowing.
Why did FASB add this project?
Per the Crowe October 2026 briefing, the project responds to diversity in practice in applying the participating interest guidance - meaning entities have been reaching different accounting conclusions on similar transactions.
SOURCES
Where this comes from
Every posting on the board is verified live.
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Previously: PCAOB QC 1000: firm quality control standard, amended August 2026
A living page: it is re-read and updated as coverage arrives; last updated Thursday October 22. Facts come from the linked sources; confirm against the issuer's own text before relying on it.
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