ISDA publishes whitepaper on accounting treatment for tokenized collateral
ISDA has released a whitepaper addressing how firms should account for tokenized collateral used in derivatives and securities financing transactions. The paper covers both traditional OTC and cleared structures and newer DLT-enabled arrangements, giving compliance and accounting teams an early reference point as tokenized collateral use grows.
- ISDA's whitepaper analyzes gross versus net balance sheet presentation considerations under both IFRS and US GAAP.
- The analysis covers tokenized representations of money market funds, government securities and other high-quality liquid assets used as collateral.
- The paper addresses traditional bilateral OTC and centrally cleared structures as well as emerging DLT-enabled structures.
- ISDA states the analysis focuses on individual product types, derivatives and SFTs, and does not address cross-product netting arrangements.