On June 24, Year 4, a major airline entered into a revolving accounts receivable facility (Facility) providing for the sale of $489 million of a dened pool of accounts receivable (Receivables) through a wholly owned subsidiary to a trust in exchange for a senior certicate in the principal amount of $300 million (Senior Certicate) and a subordinate certicate in the principal amount of $189 million (Subordinate Certicate). The subsidiary retained the Subordinate Certicate, and the company received $300 million in cash from the sale of the Senior Certicate to a third party. The principal amount of the Subordinate Certicate uctuates daily depending on the volume of Receivables sold and is payable to the subsidiary only to the extent that the collections received on the Receivables exceed amounts due on the Senior Certicate. The full amount of the allowance for doubtful accounts related to the Receivables sold has been retained, as the company has substantially the same credit risk as if the Receivables had not been sold. Under the terms of the Facility, the company is obligated to pay fees that approximate the purchasers cost of issuing a like amount of commercial paper plus certain administrative costs.

Question: The airlines management requests your advice on the appropriate accounting for this transaction. How would you respond?