Thursday, May 23, 2013

Accounting Change Would Increase Burden on Community Banks and Credit Unions

Federal bank regulators have weighed in on the Financial Accounting Standards Board’s (FASB) proposed changes relating to classifying and measuring financial instruments. In a joint comment letter, the Federal Reserve, FDIC, National Credit Union Administration, and OCC found that many aspects of the FASB's Exposure Draft do not "achieve the FASB’s simplification objective; in certain cases the Exposure Draft would reduce the overall usefulness of financial reporting."

Among these concerns are that the guidance’s application “could have the unintended consequence of requiring relatively simple traditional lending products . . . to be measured entirely at [fair value through net income].” They also said that the guidance would “significantly increase complexity and operational burden for all financial institutions, but particularly for community banks and credit unions, without commensurate benefit to financial statement users.”

Read the letter.

No comments:

Post a Comment

 

The content is provided for educational purposes only, with the understanding that neither the authors, contributors, nor the publishers of this site are engaged in rendering legal, accounting or other expert or professional services. If legal or other expert assistance is required, the services of a competent professional should be sought.

Comments appearing in response to articles appearing on this site do not necessarily reflect the views of the ABA. ABA makes no representations regarding the truth or accuracy of commentary or opinions that may be posted in response to the articles that appear on this website.

The inclusion herein of any link to a website, either in the text of an article or in a comment, does not denote any approval, sponsorship, or endorsement by the ABA, and ABA is not responsible for the content or opinions expressed on those linked websites or related commentary. This content is not licensed to third parties sites and is not affiliated with any third party site. Any reference to the author or this content on any third party site on the Internet is not authorized by the ABA.

It is the policy of the American Bankers Association to comply fully with all antitrust laws. Certain discussions should be considered off-limits, including those that contain competitively sensitive data such as price and cost information, or statements that could be construed as reflecting an attempt or desire to control or influence a particular market or markets. Future pricing or other prospective competitive information should never be shared.