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he Financial Accounting Standards Board has issued Statement no. 125, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities, which changes and clarifies the differences between secured borrowings and sales. (Examples of transactions affected include securitizations, repurchase agreements, loan participations, sales of receivables with recourse, servicing of mortgages and other assets, pledges of collateral and defeasances.) The implementation issues are complex; the FASB included a 30-page implementation appendix, although the statement itself is less than half that. Halsey Bullen, FASB project manager, said after reviewing "a lot of comments on the exposure draft that offered a lot of constructive criticism," (see also "FASB ED Changes Rules on Accounting for Transfers of Financial Assets," JofA, Jan.96, page 18) the FASB made some important changes in the final statement. Criteria changed "The key to this statement's financialcomponents approach is knowing whether you've surrendered control of an asset," said Bullen. He said the ED had listed...