MADISON, Wis. — Certain provisions in the International Accounting Standards Board's proposed standards for small and medium-sized enterprises could be detrimental to credit unions, according to World Council of Credit Unions.

One concern, according to Dave Grace, vice president of Association Services, focuses on the draft's failure to clarify whether or not credit unions fall within the document's provisions. Failure to include credit unions in the list may imply inclusion in full International Financial Reporting Standards, which could create insurmountable hurdles for many SMEs.

A second area of concern is IASB's required use of "fair-value accounting" methods and its usage in credit union mergers. The way mergers are accounted for on the newly combined entity's financial statement could be misleading and negatively impact the credit union's capital-to-asset ratios in some jurisdictions.