Archive Links

Consumer Archive
CU System Archive
Market Archive
Products Archive
Washington Archive
150x172_CUEffect.jpg
Contacts
LISA MCCUEVICE PRESIDENT OF COMMUNICATIONS
EDITOR-IN-CHIEF
MICHELLE WILLITSManaging Editor
RON JOOSSASSISTANT EDITOR
ALEX MCVEIGHSTAFF NEWSWRITER
TOM SAKASHSTAFF NEWSWRITER

News Now

Washington
CUNA supports delay in UBIT accounting guidance
WASHINGTON (1/23/07)—There is too much confusion surrounding the Financial Accounting Standards Board’s (FASB’s) Interpretation 48 (FIN 48) for nonpublic entities and the issues involved to proceed with an original effective date, said the Credit Union National Association (CUNA) in a comment letter. FIN 48 is applicable to unrelated business income taxation (UBIT) for state-chartered credit unions and provides direction on how to financially recognize such tax when there is a question regarding the amount of the tax liability. It is also important to many CUSOs, which are subject to state and federal tax. The CUNA letter was in support of a recommendation by FASB’s own Private Company Financial Reporting Committee (PCFRC) that the effective date be delayed. Scott Waite, chairman of CUNA’s Accounting Task Force, noted a recent PCFRC survey on how FIN 48 would apply in situations in which the UBIT tax liability has not fully been determined. CUNA publicized the survey through its online news service, News Now, and encouraged affected credit unions nationwide to respond to the survey by a January 31st deadline. “In light of the FASB's own questions regarding the application of FIN 48 as well as the uncertainty of credit unions and accounting professionals, we strongly support the proposed delay in the effective date of FIN 48,” wrote Waite in the Jan. 18 letter. Waite is SVP/CFO of Patelco CU, in San Francisco, as well as a member of FASB’s Financial Accounting Standards Advisory Council and its Small Business Advisory Committee. Waite highlighted credit union concerns that the qualifications for a deferral in FSP 48-b were not very clear. For instance, he said, FSP 48-b assumes the adoption of FIN 48 if previously prepared GAAP financial statements have been provided to third parties. “We believe FASB has not provided sufficient guidance regarding which entities are included in the term, ‘third parties.’ For example, we believe that if a credit union has provided required statements that conform to GAAP to its regulator but has not adopted FIN 48, then it should, as a result, be entitled to the deferral," Waite told News Now Tuesday. The UBIT issue was in the news spotlight last week when Community First CU filed a complaint in federal court challenging the Internal Revenue Service (IRS) on its determinations that certain insurance products offered to members fall outside the credit union's main mission and are subject to the tax. Community First, based in Appleton, Wisc., seeks a refund of taxes paid on income from several insurance products. The credit union said at issue is about $54,000 in taxes it paid in 2006 on income from the sale of credit life and credit disability insurance, and guaranteed auto protection (GAP) insurance. Use the resource link below to access CUNA’s complete comment letter.


RSS





print
News Now LiveWire
.@CUNA says new House bill is "further evidence" of lawmakers' interest in how @TheNCUA uses its funds from CUs. See News Now Monday.
1 hour ago
.@MECreditUnions announces winner of @YoungFreeME #SoundOff contest. @Sassquatch_Band will play Old Port Festival in June @PDD_Downtown
1 day ago
House Financial Services Com. to hold March 3 hearing to receive the semi-annual report of @CFPB Director Richard Cordray.
1 day ago
Rep. Jeff Miller (R-Fla.) re-introduced bill to ease veterans' access to loans for #smallbusiness purposes from a #creditunion (HR 1133)
1 day ago
You can get your subscription to @cuna 's free, daily, online #creditunion #news service News Now here: http://t.co/YtUejEmAYP
1 day ago