PCC reporting allowed, NCUA clarifies in accounting bulletin

Sept. 21, 2016 -- In its first accounting bulletin in two years, NCUA has concluded that a credit union is permitted to use Private Company Council (PCC) alternative accounting reporting options when preparing Call Reports for filing with the agency.

The policy is effective immediately, according to the accounting bulletin (16-1), dated Sept. 13.

Applicable to all federally-insured credit unions, the accounting bulletin clarifies the agency’s policy by concluding that the Federal Credit Union Act “supports the conclusion that the ‘uniform and consistent’ requirement [under the FCU] does not preclude the use of the PCC accounting alternatives.” The FCUA states that accounting principles applicable to reports or statements required to be filed with the Board by each insured credit union shall be “uniform and consistent with generally accepted accounting principles (GAAP),” the accounting bulletin states.

However, NCUA also noted that if it determines that a particular accounting principle within GAAP -- including a PCC accounting alternative -- is inconsistent with the statutorily specified supervisory objectives, the agency can prescribe an accounting principle for regulatory reporting purposes that is no less stringent than U.S. GAAP.

According to the accounting bulletin, PCC proposes to the Financial Accounting Standards Board (FASB) alternative recognition, measurement, disclosure, display, effective date, and transition guidance for private companies under U.S. GAAP. “This can include modifying or allowing exceptions to existing U.S. GAAP standards that would otherwise apply,” the bulletin states. “The FASB and the PCC will consider factors such as user needs, on a standard-by-standard basis, when determining which private companies will be eligible to apply accounting and reporting alternatives within U.S. GAAP.”


NCUA Accounting Bulletin 16-1: use of Private Company Council (PCC) alternative accounting reporting options