SOP issued on Accounting for Certain Loans, Debt Securities.

Statement of Position 03-3, Accounting for Certain Loans or Debt Securities Acquired in a Transfer (No. 014938CPA01), has been issued by the Accounting Standards Executive Committee. The SOP is effective for loans acquired in fiscal years beginning after Dec. 15, 2004, with early adoption encouraged. A certain transition provision applies for certain aspects of loans currently within the scope of Practice Bulletin 6, Amortization of Discounts on Certain Acquired Loans.

The SOP addresses accounting for differences between contractual cash flows and cash flows expected to be collected from an investor's initial investment in loans or debt securities (loans) acquired in a transfer if those differences are attributable, at least in part, to credit quality. It includes loans acquired in business combinations and applies to all nongovernmental entities, including not-for-profit organizations. The SOP does not apply to loans originated by the entity.

To obtain a copy of SOP 03-3 (price: $14 member/$17.50 non-member), see order information on page 7 or go to www.cpa2biz.com/store and choose Accounting and Auditing Literature.