The Financial Accounting Standards Board (FASB) is seeking feedback on a proposed Accounting Standards Update (ASU) covering residential mortgage servicing rights.
In a press release, the FASB said a residential mortgage servicing right is the contractual right to service an underlying residential mortgage loan.
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The proposal is intended to address concerns raised by stakeholders about how these rights are measured in practice.
Under the draft changes, entities would be required to reflect the effects of recapture when measuring a residential mortgage servicing right.
The proposal states that all rights and obligations linked to a residential mortgage servicing contract, including recapture, must be valued under Topic 820, Fair Value Measurement.
Recapture refers to a mortgage servicer’s ability to solicit a borrower to refinance an existing mortgage loan while retaining the servicing rights on the new loan.
The FASB said stakeholders have noted that current guidance does not clearly say whether the value related to recapture should be included in the measurement of a residential mortgage servicing right.
According to the board, that lack of clarity has led to variation in practice and reduced comparability.
The proposed ASU is based on a recommendation from the Emerging Issues Task Force.
Stakeholder comments on the FASB proposal are due by 9 November 2026.
In August, the FASB released a draft ASU aimed at clarifying how existing cash equivalent definitions apply to certain digital assets including stablecoins.
Stakeholders have been invited to review and comment on the proposal by 19 November 2026.
Beyond the digital asset guidance, the proposal calls for all reporting entities – not just those holding digital assets – to disclose more detailed information about the key components and corresponding amounts that make up their cash equivalents.
