The National Association of Federal Credit Unions said in a letter to the Financial Accounting Standards Board on Tuesday that its proposal to amend accounting standards would be overly burdensome and near useless for credit unions.
The FASB’s exposure draft is designed to craft a framework for classifying financial instruments and linking their liabilities to whether an entity is prepared to pay the liability’s contractual cash flow or settle it at fair value.
“If the FASB does decide to put credit unions under the purview of this proposed framework, there are certain provisions of the proposed accounting standards update on which NAFCU seeks additional guidance,” NAFCU said in the letter, which was written by Angela Meyster, its regulatory affairs counsel.
Meyster requested that the board provide additional guidance on whether an asset or liability requires amortized cost measurement, particularly in hold-to-maturity loans.
“NAFCU urges the FASB to ensure that hold-to-maturity loans are accounted for using the amortized cost method, because it provides the most accuracy and transparency,” Meyster said. “As highly regulated entities and member-owned institutions, it is crucial that credit unions’ assets are reflected in the most accurate and appropriate manner.”