U.S. Code > Title 12 Banks and Banking > CHAPTER 16—FEDERAL DEPOSIT INSURANCE CORPORATION (§§ 1811—1835a) > § 1831n. Accounting objectives, standards, and requirements

§ 1831n. Accounting objectives, standards, and requirements

(a) In general
(1) Objectives
Accounting principles applicable to reports or statements required to be filed with Federal banking agencies by insured depository institutions should—
(A) result in financial statements and reports of condition that accurately reflect the capital of such institutions;
(B) facilitate effective supervision of the institutions; and
(C) facilitate prompt corrective action to resolve the institutions at the least cost to the Deposit Insurance Fund.
(2) Standards
(A) Uniform accounting principles consistent with GAAP
Subject to the requirements of this chapter and any other provision of Federal law, the accounting principles applicable to reports or statements required to be filed with Federal banking agencies by all insured depository institutions shall be uniform and consistent with generally accepted accounting principles.
(B) Stringency
If the appropriate Federal banking agency or the Corporation determines that the application of any generally accepted accounting principle to any insured depository institution is inconsistent with the objectives described in paragraph (1), the agency or the Corporation may, with respect to reports or statements required to be filed with such agency or Corporation, prescribe an accounting principle which is applicable to such institutions which is no less stringent than generally accepted accounting principles.
(3) Review and implementation of accounting principles required
Before the end of the 1-year period beginning on December 19, 1991, each appropriate Federal banking agency shall take the following actions:
(A) Review of accounting principles
Review—
(i) all accounting principles used by depository institutions with respect to reports or statements required to be filed with a Federal banking agency;
(ii) all requirements established by the agency with respect to such accounting procedures; and
(iii) the procedures and format for reports to the agency, including reports of condition.
(B) Modification of noncomplying measures
Modify or eliminate any accounting principle or reporting requirement of such Federal agency which the agency determines fails to comply with the objectives and standards established under paragraphs (1) and (2).
(C) Inclusion of “off balance sheet” items
Develop and prescribe regulations which require that all assets and liabilities, including contingent assets and liabilities, of insured depository institutions be reported in, or otherwise taken into account in the preparation of any balance sheet, financial statement, report of condition, or other report of such institution, required to be filed with a Federal banking agency.
(b) Uniform accounting of capital standards
(1) In general
Each appropriate Federal banking agency shall maintain uniform accounting standards to be used for determining compliance with statutory or regulatory requirements of depository institutions.
(2) Transition provision
Any standards in effect on December 19, 1991, under section 1833d [1] of this title shall continue in effect after December 19, 1991, until amended by the appropriate Federal banking agency under paragraph (1).
(c) Reports to banking committees
(1) Annual reports required
The Federal banking agencies shall jointly submit an annual report to the Committee on Banking, Finance and Urban Affairs of the House of Representatives and the Committee on Banking, Housing, and Urban Affairs of the Senate containing a description of any difference between any accounting or capital standard used by any such agency and any accounting or capital standard used by any other agency.
(2) Explanation of reasons for discrepancy
Each report submitted under paragraph (1) shall contain an explanation of the reasons for any discrepancy between any accounting or capital standard used by any such agency and any accounting or capital standard used by any other agency.
(3) Publication
Each report under this subsection shall be published in the Federal Register.

[1] See References in Text note below.