Banks with Up to $100M in Assets Exempt from Accounting Rule

Banks with assets of $100 million or less were exempted Thursday from compliance with Financial Accounting Standard 107.

FAS 107 requires banks to disclose in a footnote to financial statements the fair value of all assets and liabilities. Compliance kicked in for banks with more than $150 million in assets at the end of 1992.

The Financial Accounting Standards Board required all banks to comply at yearend 1995, but did propose exempting banks with less than $10 million in assets. On Thursday, the board decided to increase the exemption 10-fold; banks with $100 million in assets or less do not have to follow FAS 107.

The Independent Bankers Association of America had asked the accounting standards board to exempt all banks with $150 million in assets or less. But Ann Grochala, IBAA's director of bank operations, was still thrilled with the win Thursday.

"This gives relief for hundreds of smaller institutions," she said. "It really sets a precedent that small institutions don't need the accounting burdens large institutions do."