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MCUA Weighs In on FAF's Private Company Council

The Missouri Credit Union Association (MCUA) filed a comment letter on May 11, 2015, providing several suggestions to improve the Financial Accounting Foundation's (FAF) Private Company Council (PCC), which was established in May 2012 to improve the process of setting accounting standards for private companies. While supporting the objective and work of the PCC, MCUA believes it can do more to actively engage stakeholders as it analyzes new and existing standards.

In our letter, MCUA asks the FAF to ensure that the PCC's efforts to "improve" private-entity standards continue to result in standards that are no more complex or burdensome than existing U.S. generally accepted accounting principles (GAAP). Any modifications to GAAP intended to improve the standards for private entities should involve simplifying overly complex standards and/or decreasing the reporting burden of unnecessarily burdensome standards.

MCUA urges FASB and the PCC to work closely with regulatory agencies that oversee entities, including financial institutions that are required to adhere to GAAP. Specifically, FASB and the PCC should coordinate their efforts with NCUA since whether an entity can apply established GAAP alternatives may ultimately be determined by regulators or other financial statement users that may not accept financial statements that reflect GAAP alternatives.

Lastly, although the PCC's involvement with FASB's pending credit losses proposal as it will apply to financial institutions is limited, MCUA used the opportunity in their letter to again express concerns to the FAF regarding the proposal. MCUA remains concerned that the proposed standard would have serious unintended consequences on our economy that would ultimately adversely impact all consumers.