ACB: Press Releases

Contact:	Robert Schmermund (202) 857-3104 Jim Eberle (202) 857-3145	Jim Eberle (202) 857-3145 (work) (703) 893-2593 (home) [email protected]	For Immediate Release August 7, 2006 #06-43
E-mail: [email protected]

ACB URGES ACCOUNTING GROUP TO RECONSIDER SPLIT-DOLLAR LIFE INSURANCE DECISION

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WASHINGTON, D.C. — America’s Community Bankers has urged reconsideration of a proposal to require companies to book the value of a split-dollar life insurance policy as a liability. The draft proposal was issued by the Emerging Issues Task Force of the Financial Accounting Standards Board.

ACB said in a comment letter that if FASB ratifies the EITF’s tentative conclusion, “bankers will be faced with a potentially large negative charge to their statements of financial position, which will negatively impact not only the profit and loss of the bank, but also their overall capital position.”

ACB noted that there was a great deal of dissension within the EITF, and recommended reconsideration of the tentative conclusion. ACB encouraged the EITF to pass the issue to FASB if the EITF cannot achieve a consensus.

Split-dollar plans are a method of obtaining lower-cost life insurance for key employees by splitting the premiums and proceeds between employer and employee.

Click here for the comment letter.

America’s Community Bankers is the national trade association committed to shaping the future of banking by being the innovative industry leader strengthening the competitive position of community banks. To learn more about ACB, visit www.AmericasCommunityBankers.com.

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