Credit unions could get a reprieve from the requirement that they book their loans at their current value on their balance sheets, as a result of decision made today by the Financial Accounting Standards Board.
In a preliminary ruling, the board said credit unions could carry their assets and liabilities at an amortized cost. The board is set to issue a final rule later this year.
The proposed rule would have required credit unions and other financial institutions with assets of more than $10 million to measure loan loss reserves on an "expected loss," basis rather than the current method which is a historical, or "incurred loss," approach.
Credit unions and banks had maintained that the proposed rule would have reduced their book value
For more information, go to: www.fasb.org