Citi, JPMorgan Asked by FASB to Move Assets Onto Books

Citigroup (C) and JPMorgan (JPM) will be required starting next year to add billions of dollars of assets and liabilities to their balance sheets under rules approved today (Monday) by the Financial Accounting Standards Board [FASB], according to news service Bloomberg.

The rules are effective for annual reporting periods after Nov. 15.

From Bloomberg: U.S. regulators said the 19 lenders subjected to stress tests completed this month would have to bring about $900 billion of assets onto their balance sheets because of the FASB changes..
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“This change may have a significant impact on Citigroup’s consolidated financial statements as the company may lose sales treatment for certain assets,” Citigroup said in its annual report released in February.

In March, JPMorgan estimated in its annual report that the “impact of consolidation” could be as much as $70 billion of credit card receivables, $40 billion of assets related to so- called conduits and $50 billion of other loans, including residential mortgages.
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The FASB vote today eliminates the so-called Qualifying Special Purpose Entity, a type of trust that was exempt from balance-sheet treatment.