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Version date: 26 February 2020 - onwards

Arrangements under which an entity retains the contractual rights to receive the cash flows of a financial asset but assumes a contractual obligation to pay the cash flows to one or more recipients (paras. BCZ3.14 - BCZ3.24)

BCZ3.14 The original IAS 39 did not provide explicit guidance about the extent to which derecognition is appropriate for contractual arrangements in which an entity retains its contractual right to receive the cash flows from an asset, but assumes a contractual obligation to pay those cash flows to another entity (a ‘pass-through arrangement’). Questions were raised in practice about the appropriate accounting treatment and divergent interpretations evolved for more complex structures.