Merger Accounting Rules Delayed
Credit Union Advisor, 2006 Fall

We continue to monitor the development of the new accounting rules related to credit union mergers, including two recent Exposure Drafts released by the Financial Accounting Standards Board (FASB) earlier this month. The rules proposed by the FASB would require the acquisition (purchase) method of accounting for the combination of mutual entities, including credit unions. Additionally, the proposed rules may require credit unions to recognize intangible assets, goodwill, or both as a result of a merger. Thereafter, any goodwill or intangible assets recognized in a merger would be evaluated for impairment, consistent with FASB Statement No. 142, Accounting for the Impairment or Disposal of Long-Lived Assets. Both proposals are open to public comment through January 29, 2007 and discussion at the FASB’s public roundtable meeting scheduled for March 27, 2007. As such, for 2007, the current pooling method will still be in effect until the proposal(s) are finalized. In other words, no changes will be required for mergers occurring in 2007.