WASHINGTON-CUNA has asked the Financial Accounting Standards Board to delay its proposals for changes in the accounting for credit losses and loan impairments.
CUNA CEO Bill Cheney met last week with FASB board member Russell Golden to discuss the credit loss reporting proposal to try to get its implementation delayed.
Cheney and other credit union representatives met with Golden and other FASB representatives at CUNA's offices, where they highlighted their concerns regarding the reporting proposal that would use a single "expected loss" measurement for the recognition of credit losses. This would replace the multiple existing impairment models in U.S. GAAP that primarily use an "incurred loss" approach.
Credit unions are concerned that the proposed "expected loss" approach could require use of speculative forecasting of the performance of an asset over the remainder of the asset's life, Cheney and other CUNA and credit union representatives told the FASB representatives.
According to Accounting Today, a sister publication to Credit Union Journal, CUNA also warned that the proposal is extremely complex and will create new costs for credit unions.
During the meeting, Golden told CUNA that the board may consider extending the April 30 deadline for comments on its credit loss reporting proposal.
Golden noted that the IASB is accepting comment on a similar proposal for international financial reporting statements until July 5, and he said FASB is considering adopting a later deadline along those lines.
Potential Extension
Asked about the possible extension on the comment deadline, FASB spokesman Robert Stewart told Accounting Today, "As we've said before, the FASB will consider all comments received on both the IASB and FASB impairment proposals, including comments in which stakeholders have asked us to extend."
Financial Accounting Foundation VPGovernment Affairs and external Relations Grace Hinchman told CUNA that FASB is also working on guidance and plans to release that guidance in the coming weeks.
The FAF is the parent organization of FASB and the Private Company Council.
