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NAFCU is asking members to submit their input by June 12 on the Financial Accounting Standards Board's proposal to update an accounting standard on prepaid stored-value cards that do not expire and are not subject to unclaimed property laws.

The proposal is aimed at helping financial institutions streamline their accounting practices.

Currently, there is no uniform standard for how a financial institution accounts for prepaid stored-value cards that do not expire and are not subject to unclaimed property laws. Since financial institutions do not have a framework for naming these cards as either a financial liability or income – depending on whether or not they get used – this proposal states that these prepaid products may only be recorded as income after the "likelihood of the customer [using the card] becomes remote."

This proposal would only apply to those prepaid stored-value cards that:

• have no expiration date;
• are not subject to unclaimed property laws;
• are not redeemable for cash, goods and services, or both; and
• are not attached to a segregated financial institution account (such as a customer depository account).
• NAFCU will issue a Regulatory Alert on this proposal this week.

The FASB comment period for this proposal ends June 29.