PT - JOURNAL ARTICLE AU - Allen Schulman TI - Credit Risk Retention and ASC 810–Consolidation AID - 10.3905/jsf.2015.21.2.028 DP - 2015 Jul 31 TA - The Journal of Structured Finance PG - 28--33 VI - 21 IP - 2 4099 - https://pm-research.com/content/21/2/28.short 4100 - https://pm-research.com/content/21/2/28.full AB - The U.S. Credit Risk Retention rule, passed in October 2014, requires the sponsor of any asset-backed security (ABS) to retain at least 5% of the credit risk of any ABS issuance that is transferred or sold to a third party. In addition to the standard vertical and horizontal approaches, some classes of ABS have alternate risk retention options based on standard market practices that provide the equivalent of credit risk retention. This article will, in terms of FASB Accounting Standards Codification (ASC) 810–Consolidation, discuss credit risk retention considerations, first for ABS in general and then for some of these alternative options. Whether or not a special-purpose vehicle must be consolidated is one of a securitization sponsor’s considerations in selecting a credit risk retention method.TOPICS: Asset-backed securities (ABS), legal/regulatory/public policy, credit risk management