With fair value accounting the new component in the rules, Patelco for one had to spend extra work hours and hire an outside firm to help compute asset fair value on loans involved in two 2008 California mergers of Cal State 9 and Sterlent CU, originally conserved by the NCUA, said Waite, who is also an adviser to the Financial Accounting Standard Board. He has been an adviser since 2003.

"Now you even have to look at FICO scores of the loans as compared to the current scores as part of analyzing the borrower's current capacity to pay," said Waite. Add to that the current estimate of the collateral value of real estate mortgages and you start approaching the true fair value of the loans, he said.

"Think of it this way," he went on, "if the loans were sold, what would someone buy them for. After all, you are now the acquirer, the buyer."

In the old way of pooling, "it was a matter of adding one plus one equals two," but now with fair value accounting, you must value the entire entity first and then the assets and liabilities separately, said Waite.

The resulting net equity amount is what your acquired equity becomes, he said, and "since fair value rarely is the same as book value, the answer to one plus one will hardly ever equal two."

Although the accounting work is arduous and costly, said Waite, a chief financial officer can't forget his or her primary role, "which is to think about the merger from a more strategic financial perspective. Is there a current and future economic benefit to the merger in the first place? If the answer is no, the next question is why are you merging?"

For the $1.6 billion Lake Trust CU of Lansing, Mich., the product of a 2010 merger, the answer is yes, maintained Brian McVeigh, senior vice president.

"The merger has strengthened our two institutions and has more than offset any one-time cost from accounting expense," said McVeigh, referring to Michigan's largest and most recent consolidation–that of Detroit Edison and NuUnion.

There's no doubt, he said, that CUs involved in mergers "may require a CPA on staff with special expertise" to handle the new rules as management leans on the auditors.

Even in smaller CUs, the extra accounting expense can be a burden, said Dan Leclerc, senior vice president/chief financial officer of Aventa CU of Colorado Springs, in recounting costs associated with a 2009 consolidation of Pueblo City Employees CU. "It all was a little frustrating."

According to Chief Financial Officer Peg Lamb of the $410 million Marine Credit Union, La Crosse, Wis., accounting has become completely different as "most merger costs can't be capitalized and instead it's required that all acquisition costs–with the exception of capital issuance costs–must be recognized as expense or period costs when incurred, usually after the merger."

"If, for instance, two credit unions have separate core systems, the core system you choose not to keep may have multiple years left in the contract," she said. Because a CU can't eliminate the acquired CU's processing system until after the merger when its members' accounts are converted to the acquirer's system, these costs are incurred and expensed post-merger. Not factoring these types of issues into the total cost of the merger can be expensive.

One other chief financial officer, Keith Sultemeier, executive vice president of Security Service FCU of San Antonio, said his CU began using the now-required purchase method of accounting for all significant acquisitions in 2006.

"Based on our interpretation of the current GAAP, SSFCU's transactions failed to meet the requirements for treatment as pooling of interests," he said. Security has used the pooling method on a limited number of very small acquisitions since 2006 strictly for expedience.

The purchase method is definitely the more complex of the two approaches, but once processes have been designed to satisfy these rules, it is relatively straightforward, he said.

Compliance with the new accounting rules "does add an additional level of subjectivity and cost to acquisitions. Often third parties must be retained to provide fair market values of assets," Sultemeier added.

"That is not to say that credit unions cannot value financial assets internally, but independent auditors and regulators have shown a high preference for arm's length valuations. Embedded costs such as long-term contractual obligations or employee retirement plans do not change regardless of accounting treatment," he said.