Some Pointers On The New Securitization Accounting: SFAS No. 125 became effective on January 1, 1997. Its purpose: to standardize the accounting for transfers of assets, including those that occur in securitizations of assets. This statement produced some subtle changes in financial reporting that merit the attention of analysts and investors. First, SFAS No. 125 can alter the profitability profile for some securitizers. Second, some securitizers will show earnings when they replenish trusts established for pass-through securities. Finally, securitizing firms that perform servicing functions and receive income in excess of the amount they are allowed by contract will record "interest-only" receivables that must be recorded at fair value. The way a firm chooses to treat such receivables will also have an effect on profitability. A review of the first quarter's results for a few financial companies highlights some of these side-effects of SFAS No. 125.