WASHINGTON (9/11/13)--The Credit Union National Association continues to examine and analyze the Financial Accounting Standards Board's proposal that would allow credit unions and other nonpublic business entities to use accounting and reporting alternatives under U.S. Generally Accepted Accounting Principles (GAAP), and CUNA has highlighted two areas of credit union concern in what is largely an otherwise positive proposal.
The FASB proposal, which is out for public comment until Sept. 20, could result in more flexible accounting requirements for nonpublic business entities. However, FASB has acknowledged that whether a private entity is permitted to apply such alternative GAAP standards "may ultimately be determined by regulators."
The proposal would define a public business entity as an organization that meets any one of five criteria, such as that the entity is required to file financial statements with a regulator in preparation of sale of securities. As proposed, credit unions would not be included within the definition of a public business entity, which is an aspect of the proposal that CUNA supports.
Further, CUNA supports the proposed criteria included in the definition. However, CUNA Senior Assistant General Counsel Luke Martone said, as the proposed definition would include as a PBE certain entities that hold "unrestricted" securities, we ask FASB to clarify exactly what this criteria would include, as well as to clarify that this is not intended to cover credit unions that may hold certain types of securities.
FASB and CUNA continue to accept public comment on this issue. For a CUNA comment call, use the resource link.