First quarter 2010 company regulatory filings reflect the latest change in the Financial Accounting Standards Board Statements 166 and 167. Approved by the Federal Deposit Insurance Corp. board of directors in December, the new rules that became effective in January require credit card issuers to include securitized card loans on their balance sheets.
Before the change, issuers included securitized card loans as a Special Purpose Entity and reported them in an off-balance sheet. The amount of securitized card loans combined with the amount reported on the balance sheet comprised the credit card loans on a managed basis, a financial measure inconsistent with generally accepted accounting principles. Effective Jan. 1, the managed basis is equivalent to the amount reported on the company’s balance sheet.
The accounting change affects the largest credit card issuers the most because they securitize more of their credit card loans.
