ARLINGTON, Va.-The Financial Accounting Standards Board is set to release a proposed rule on business combination accounting with clarification in February with a 90-day comment period, according to NAFCU Director of Regulatory Affairs Gwen Baker. “We have ongoing discussions with staff from FASB, so we just touched base with them to see where it was heading,” she explained. Baker added that FASB is not backing down yet from the January 2006 effective date for the exposure draft (proposal) nor the substance though they do plan some clarification. The proposal would eliminate the “pooling” method, where merging institutions assets are combined, to the “purchase” method, which would keep the acquiring institutions from counting the merged institutions retained earnings on its balance sheet. This change could drastically reduce the number of credit union mergers because many acquiring credit unions would get into trouble with Prompt Corrective Action if they cannot pool the assets. NAFCU lobbyists are pursuing a legislative remedy that would revise the definition of net worth from retained earnings to capital as defined by NCUA. FASB previously said they do not object to this amendment, and Baker said she has not heard any concerns expressed by the banking industry.

Complete your profile to continue reading and get FREE access to, part of your ALM digital membership.

Your access to unlimited content isn’t changing.
Once you are an ALM digital member, you’ll receive:

  • Critical information including comprehensive product and service provider listings via the Marketplace Directory, CU Careers, resources from industry leaders, webcasts, and breaking news, analysis and more with our informative Newsletters.
  • Exclusive discounts on ALM and CU Times events.
  • Access to other award-winning ALM websites including and

Already have an account?


Credit Union Times

Join Credit Union Times

Don’t miss crucial strategic and tactical information necessary to run your institution and better serve your members. Join Credit Union Times now!

  • Free unlimited access to Credit Union Times' trusted and independent team of experts for extensive industry news, conference coverage, people features, statistical analysis, and regulation and technology updates.
  • Exclusive discounts on ALM and Credit Union Times events.
  • Access to other award-winning ALM websites including and

Already have an account? Sign In Now
Join Credit Union Times

Copyright © 2022 ALM Global, LLC. All Rights Reserved.