Bankers may soon have to think about restructuring existing qualifying special purpose entities, even though the Financial Accounting Standards Board grandfathered those structures, in order to comply with new accounting going ahead.

According to project manager Halsey Bullen, the board’s decision March 10 on guidance to implement the amendment to FAS 125 is similar to Emerging Issues Task Force (EITF) Issue No. 97-6. That issue grandfathered previous transfers to existing structures. Likewise, the new guidance would impose no retroactive accounting changes on existing SPEs. However, Bullen cautioned, existing securities structures to which transfers will be made in future may have to be altered to meet the new accounting requirement.

The guidance will mainly affect revolving period securitizations such as portfolios of credit card loans or home equity loans, Bullen said.

The board will discuss the effective date for the new amendment in a future meeting, possibly March 24. Previously the board had said the amendment would be effective at the end of this year. It recanted, however, because work on the amendment fell behind, and the completed document still must be approved by the board, go through a comment period and the issues must all be reexamined by the board. Bullen said whatever the new effective date, it would provide sufficient to give bankers time to restructure any necessary deals.

The board also limited the necessity of disclosures about characteristics, cash proceeds and gain and loss to securitizations, excluding previously-considered whole-loan sales or loan participations.

Finally, the board reaffirmed its previous stance that auditors and attorneys should make the decision whether sales treatment should be given to securitization deals done by banks subject to FDIC receivership, should the bank declare insolvency.