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23 de septiembre de 2004


WOCCU Supports Characterizing Membership Shares As Liabilities

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Madison, Wi-In response to the heated debate over the characterization of cooperative membership shares, the International Accounting Standards Board (IASB) opened its proposed guidelines, Members' Shares in Co-operative Entities—also called Draft Interpretation 8 or just D8—for public comment this month. The World Council of Credit Unions, Inc. (WOCCU) took the opportunity to issue a three-page letter arguing that membership shares should be defined as a liability, not equity in certain circumstances.

The debate centers around the fact that some of the rights credit union members enjoy, such as voting rights, seem to place their shares in the category of an equity, while other rights, such as the right to withdraw their shares upon leaving the institution, suggest that these shares are a liability.

Credit unions throughout the United States, Mexico, Guatemala, Ireland, Australia, New Zealand and nearly all provinces of Canada already treat membership shares as a liability. However, many nations have long considered the shares equity and would like to keep it that way.

WOCCU's support of liability status for shares is based on three key arguments. Firstly, WOCCU believes that accounting treatment does not alter the nature of the credit union system as some have argued. "Whether members' shares are classified as equity or liability, the fundamental characteristics of the one-member, one-vote principle remains unchanged," stated the official letter sent to the IASB.

Another argument is, by classifying member shares as equity, credit unions place their members' savings at risk. This is highly problematic because credit unions have an obligation to protect members' savings. The third and final argument states that shares cannot be considered equity because they can be delivered or "returned" to member at any time.

There are several conditions under which WOCCU believes member shares should be considered equity—if the credit union or cooperative has the unconditional right to refuse redemption of members' shares, or if the institution is prohibited by an outside governing body from redemption of members' shares.

WOCCU understands that re-characterization of member shares will be an adjustment for credit unions that have been classifying them as equity for many years. Thus, it has suggested a five- year transition period, during which the credit union must transfer 20% of all members' shares from equity to liability status each year.

World Council consulted heavily with European Cooperative banks in these deliberations to ensure a coordinated position.



El Consejo Mundial de Cooperativas de Ahorro y Crédito es la asociación gremial y agencia de desarrollo para el sistema internacional de cooperativas de ahorro y crédito. El Consejo Mundial promueve el crecimiento sustentable de las cooperativas de ahorro y crédito y otras cooperativas financieras en todo el mundo a fin de facultar a las personas para que mejoren su calidad de vida a través del acceso a servicios financieros asequibles y de alta calidad. El Consejo Mundial realiza esfuerzos de defensa activa en representación del sistema global de las cooperativas de ahorro y crédito ante organizaciones internacionales y trabaja con gobiernos nacionales para mejorar la legislación y la regulación. Sus programas de asistencia técnica introducen nuevas herramientas y tecnologías para fortalecer el desempeño financiero de las cooperativas de ahorro y crédito y profundizar su alcance comunitario.

El Consejo Mundial ha implementado 290 programas de asistencia técnica en 71 países. A nivel mundial, 57,000 cooperativas de ahorro y crédito en 103 países atienden a 208 millones de personas. Obtenga más información sobre el impacto global del Consejo Mundial en www.woccu.org.



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