The American Institute of Certified Public Accountants has issued guidance on the accounting treatment that mortgage bankers have to use for loan commitments that are treated as derivatives.The "practice aid" developed by the AICPA includes examples of disclosures that meet the accounting requirements mandated by the Securities and Exchange Commission in Staff Accounting Bulletin No. 105. "Disclosures in the practice aid include registrant's methods and assumptions used to estimate the fair values of derivative loan commitments and any associated hedging strategies," the AICPA said. Mortgage bankers must apply SAB 105 to new loan commitments that are entered into after March 31.

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