NTCA Applauds Decision by Financial Accounting Standards Board to Defer SFAS 150Arlington, Va., November 11, 2003 — The National Telecommunications Cooperative Association (NTCA) applauds the decision by the Financial Accounting Standards Board to INDEFINITELY defer its Statement of Financial Accounting Standards (SFAS) 150, a rule that would have required cooperatives to classify member equity as debt.
"The deferral of this rule is truly a victory for all involved in the cooperative business structure," said NTCA Chief Executive Officer Michael E. Brunner. “NTCA and our member companies submitted comments to the Financial Accounting Standards Board, asking them to recognize the unique telephone cooperative structure, as well as the severe impact, if implemented, SFAS 150 would have on the ability of telephone cooperatives to obtain affordable debt financing.
"While NTCA understands that SFAS 150 was applicable to public and nonpublic entities, the ruling would have produced harsh consequences when applied to the telephone cooperative structure. For this reason, NTCA is pleased with the board’s decision to defer the ruling indefinitely.
"In the meantime, NTCA plans to work with the board to ensure that telephone cooperatives are exempt from the SFAS entirely," Brunner concluded.
NTCA is the premier association representing more than 550 locally owned and controlled telecommunications cooperatives and commercial companies throughout rural and small-town America. NTCA provides its members with legislative, regulatory, and industry representation; meetings, publications, and educational programs; and an array of employee benefit programs.