Once subprime mortgages were put into QSPEs, they were ticking time bombs - Herz
The accounting standard setters have resolved to kill qualified special purpose entities which allowed lenders to take assets off their balance sheets.
US Financial Accounting Standards Board chairman Robert Herz described the off balance sheet structures as 'ticking bomb' assets that were not 'Q-able' in a joint meeting with the IASB where they discussed their response to accounting issues that had arisen during the credit crunch.
The FASB is to release an exposure draft by June, in which it proposes to eliminate the structures from accounting literature altogether.
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