ALEXANDRIA, Va. – NCUA said yesterday credit unions should expense the premium it assesses to recapitalize the National CU Share Insurance Fund when the premium is assessed, probably in the fourth quarter of this year.
The guidance, to be explained in a new Accounting Bulletin 09-2 to be issued today, is based on the American Institute of Certified Public Accountants’ Statement of Position 01-6, which states, "to the extent that the NCUA Board assesses premiums to cover prior operating losses of the insurance fund or to increase the fund balance to ‘normal operating levels,’ credit unions should expense those premiums when assessed," NCUA said yesterday.
If a credit union chooses to use any other treatment for the premium they should be prepared to provide written guidance from their auditors to support that treatment, NCUA said.
NCUA is expected to assess a premium of $5.9 billion to pay for the costs of the corporate credit union bailout. But Congress is considering several measures that would allow credit unions to stretch out the costs of the premium over several years.
