Loan Accounting Reform and Deficit Reduction Act of 1986 - Requires each Federal agency to transmit to the Secretary of the Treasury any direct loan asset (agreement by the recipient to repay the loan amount plus interest) received by the agency together with such information about the recipient as the Secretary may prescribe. Permits the Secretary to disclose such information to the extent necessary to sell such asset. Directs the Secretary to sell any such asset within 90 days after receiving it to the highest bidder at a public auction. Permits the Secretary to sell such assets through pooled participation arrangements only if such arrangements permit the proper allocation of subsidy costs to the appropriate budget account. Declares that such assets shall be sold without recourse to the Government and with no Government guarantee. Requires any subsidy recognized upon the sale of any asset or any obligation guaranteed by a Federal agency to the Federal Financing Bank to be treated as an agency outlay. Provides that no agency authority to make any direct loan shall be effective: (1) except to the extent any subsidy recognized upon the sale of the direct loan asset is provided for in advance in an appropriation Act; and (2) unless a limit on the amount of direct loans an agency may make in the fiscal year has been established in an appropriation Act. Requires the Secretary to prepare standard forms which agencies shall use for direct loan agreements. Requires the Secretary to impose a fee for its costs of acting as agent for an agency in selling any asset. Includes assets sold under this Act as securities that are exempt from the securities laws. Requires the Secretary to submit an annual report to the Congress on direct loan asset sales under this Act. Declares that this Act does not change the responsibility for servicing direct agency loans.