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SFAS No.
33 |
Accounting for Transfers of Financial Assets and
Extinguishments |
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of
Liabilities |
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 Status |
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Issued by
the Financial Accounting Standards Committee in Taiwan on 22
May, 2003. |
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Summary |
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Scope |
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The purpose of this Statement is to
establish the accounting standard for transfer of |
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financial assets and extinguishment of
financial liabilities. |
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Derecognition of a Financial Asset |
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The derecognition criteria are based
on a control approach. The determination of |
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control is broader than just a
physical ownership or custody notion. Certain elements |
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of a risk and rewards approach have been
included in the derecognition model. |
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Therefore, the derecognition approach in this
statement is a combination of a control
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approach and a risks and returns approach. The
Statement does not indicate clearly |
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which approach takes precedence and instead
alternates between attributes of each
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approach in the various provisions. |
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The substance of control and the
extent to which the risks and returns are transferred |
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(that is, whether the transferee is
free to pledge or exchange substantially the full fair
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value of the asset) should both be
assessed in determining whether derecognition is |
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appropriate. |
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The concept of control in this
statement focuses on the ability of the transferee to |
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obtain all or most of the rights to
benefits comprising a financial asset (essentially the |
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risks and returns of ownership). This
condition usually is considered to be met if the |
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transferee has the ability to exchange
or pledge approximately the full fair value of the |
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transferred asset. |
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The difference between the carrying
amount of a financial asset (or part of a financial |
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asset) derecognized and the
consideration received shall be recognized in profit or loss. |
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Derecognition of a Financial Liability |
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An entity shall remove a financial
liability (or a part of a financial liability) from its |
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balance sheet when, and only when the
obligation specified in the contract is |
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discharged or cancelled or expires. |
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The difference between the carrying
amount of a financial liability (or part of a financial |
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liability) extinguished or transferred
to another party and the consideration paid shall be |
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recognized in profit or loss. |
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Conslidation of Special Purpose Entity |
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There
is no qualified-special-purpose-entity exception to the
consolidation criteria. |
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Effective
date
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This statement becomes effective for
financial statements for the fiscal year ending on |
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or after December 31, 2004. |
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