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The accounting for transfers of financial assets is predicated on determining which entity controls the asset after the exchange. Transferred financial assets are considered sold (and derecognized from the transferor’s balance sheet) when the transferor (including the consolidated affiliates included in the financial statements being presented, and its agents) has surrendered control over the financial assets to the transferee. The sale accounting model in ASC 860 is not a "risks and rewards" model, although the nature and extent of a transferor’s continuing economic involvement with a transferred financial asset may impact the legal isolation analysis.
This chapter addresses the application of the three control criteria in ASC 860-10-40-5 to transfers of financial assets within the scope of ASC 860 and discusses related implementation issues.
1 References to a "transferor" throughout this chapter should be read to mean "transferor and its consolidated affiliates" or "transferor, consolidated affiliates and its agents" where the context so requires.
2 References to "transferred financial asset(s)" in this chapter include transfers of participating interests and groups of entire financial assets.

PwC. All rights reserved. PwC refers to the US member firm or one of its subsidiaries or affiliates, and may sometimes refer to the PwC network. Each member firm is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.

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