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CUNA backs FASB OTTI fair value plans
WASHINGTON (4/2/09)—The Credit Union National Association (CUNA) backed two recent Financial Accounting Standards Board (FASB) proposed staff positions (FSPs) that are intended to provide additional application guidance regarding fair value measurements and impairments of securities. In summary, FASB released the following for comment on March 18:
* Proposed FSP FAS 157-e, called Determining Whether a Market Is Not Active and a Transaction Is Not Distressed, would provide guidelines on how to best apply FASB Statement No. 157, Fair Value Measurements, in a market that is not active. * Proposed FSP FAS 115-a, FAS 124-a, and EITF 99-20-b, Recognition and Presentation of Other-Than-Temporary Impairments(OTTI), is intended to provide greater clarity and consistency in accounting for and presenting impairment losses on securities.
In an April 1 comment letter to FASB, CUNA wrote generally supports the proposed FSP on OTTI and encouraged the board to make the guidance applicable both to debt and equity securities. CUNA wrote that FASB’s companion proposed FSP on fair value likely would minimize the need for the OTTI proposal. However, the group encouraged FASB to also adopt the OTTI plan “as long as it is entirely consistent with the proposal on fair value and other existing guidance.” CUNA also asked FASB to make the guidance retroactive to Dec. 31, 2008. FASB has proposed both sets of guidance would be effective for interim and annual periods ending after March 15. FASB has scheduled an April 2 meeting to evaluate all comment letters and other input received on the FSPs. Use the resource link below to read CUNA’s comment in its entirety.
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