TY - JOUR T1 - Credit Risk Retention and ASC 810–Consolidation JF - The Journal of Structured Finance SP - 28 LP - 33 DO - 10.3905/jsf.2015.21.2.028 VL - 21 IS - 2 AU - Allen Schulman Y1 - 2015/07/31 UR - https://pm-research.com/content/21/2/28.abstract N2 - 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 ER -