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Fair value burner still hot
WASHINGTON (11/18/10)--The Financial Accounting Foundation (FAF) appointed a new CEO and four new members to its Board of Trustees this week, and Financial Accounting Standards Board (FASB) Acting Chair Leslie Seidman has said that the FASB’s search for its own board additions will not derail its work on fair value and other pressing issues. Seidman made her comments, as reported in American Banker, before a recent Financial Executives International conference. Teresa Polley, who has worked with FASB in the past, will work with new FAF Board of Trustees members Carol Anthony Davidson, Stephen Howe, W.M. Lawhon and Mary Stone going forward. The FAF is comprised of members of the private sector and is tasked with overseeing FASB and the Governmental Accounting Standards Board (GASB). The Credit Union National Association (CUNA) has met several times with the FAF’s Grace Hinchman to discuss CUNA's concerns with FASB's proposal on accounting for financial instruments, as well as other projects. FASB has not yet appointed the two new board members needed to take it to the full board membership of seven. FASB was previously comprised of five board members. CUNA also recently reached out to FASB to specifically discuss the fair value issue, with CUNA Accounting Subcommittee Chairman and Patelco CU Chief Financial Officer Scott Waite telling FASB members during an open meeting that reporting fair value under U.S. Generally Accepted Accounting Principles (GAAP) is simply not useful to the members, creditors, board members, and regulators of credit unions. Waite told the FASB panel that credit unions "provide an economic value to consumers by leveraging their not for profit status in the higher rates on deposit and lower rates on loans." FASB’s fair value proposal, which is still being developed, would require most financial assets and liabilities to be reported under GAAP at fair value. Credit unions over $10 million in assets are required to comply with GAAP. CUNA Senior Vice President/Deputy General Counsel Mary Dunn has said that CUNA will "continue pursuing a positive result for credit unions" as FASB works on the final rule, which could potentially take effect in 2013.


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