WASHINGTON (8/13/13)--The Credit Union National Association's comments on the Financial Accounting Standards Board (FASB) proposal to redefine the meaning of "public business entity" and its positive impact on credit unions were the topic of several national media stories this weekend, including Bloomberg BNA, Accounting Today and Financial Planning.
BNA reported CUNA Deputy Counsel Mary Dunn's analysis of the proposal, which would enable credit unions as non-public entities to qualify for more flexible accounting requirements.
Dunn said that being able to qualify for private company generally accepted accounting principles (GAAP) modifications could potentially provide relief for nonpublic entities on how to account for credit losses.
"That [proposal] could be a good candidate for one of the areas that credit unions can benefit because they just don't need to have all of that reporting that would be required under [GAAP] for their stock holders because they don't have stock holders," she said.
The article noted that CUNA has long advocated to FASB that credit unions, based on their structure as not-for-profit, member-owned financial cooperatives, should not be subjected to onerous and costly reporting requirements that should be applied to only publicly traded companies. "By law, credit unions must use their earnings to build capital and as member-owned cooperative institutions, work hard to provide favorable rates on loans and savings and to minimize fees," she said.
Dunn also noted that although the proposal is a positive step for credit unions in terms of affirming their nonprofit status under GAAP, two potential areas for concern are its lack of applicability to existing GAAP, and the potential of interference from regulators.
Another article along the same lines also appeared in Accounting Today and was republished in Financial Planning, myplaniq.com, and silobreaker.com. Use the link for an example.