There is a financial storm developing. One with the capacity to wreak havoc on the income statements of credit unions (and other institutions) all across America.
The Financial Accounting Standards Board, a private, non-profit organization whose primary purpose is to establish and improve generally accepted accounting principles for public and non-public entities within the U.S., is expected to issue a final accounting standard in the coming weeks that will significantly alter how marketable equity securities are classified and measured.
Under the proposed standard, all investments in marketable equity securities will be recorded at fair value through net income. That is to say, price changes in equity securities will be recorded directly in net income. The available for sale classification, where price changes are recorded as unrealized gains/losses in other comprehensive income, would no longer exist for equity securities.
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