Aicpa credit union national conference allowance disclosures for credit losses - workshop 102

AICPA - ALLOWANCE DISCLOSURES FOR LOAN LOSSES Workshop Session 102 DeLeon & Stang, CPAs and Advisors Allen P. DeLeon, CPA [email_address] USE Credit Union Adele Sandberg [email_address]

Speaker biography – Allen P. DeLeon, CPA ,[object Object],[object Object],[object Object],[object Object]

Speaker biography – Adele Sanberg, CPA ,[object Object],[object Object],[object Object]

Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object]

BACKGROUND ,[object Object],[object Object],[object Object],[object Object]

EFFECTIVE DATE ,[object Object],[object Object],[object Object],[object Object]

WHAT IS THE IMPACT? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

WHAT IS THE SCOPE? ,[object Object],[object Object],[object Object],[object Object],[object Object]

WHAT IS THE SCOPE? (CONTINUED) ,[object Object],[object Object],[object Object],[object Object],[object Object]

TERMINOLOGY ,[object Object],[object Object],[object Object],[object Object]

TERMINOLOGY (CONTINUED) ,[object Object],[object Object],[object Object],[object Object]

NEW DISCLOSURE REQUIREMENTS Category Portfolio segment Class Roll-forward of allowance for loan losses Credit Quality information Non-accrual and past due loans Impaired loans (individually evaluated) Modifications (for both portfolio segment and class levels)

ALLOWANCE FOR LOAN LOSSES – PORTFOILIO SEGEMNT Previous requirements New requirements Accounting policies related to the allowance for loan losses ,[object Object],[object Object],[object Object],[object Object],Roll-forward of total allowance for loan losses ,[object Object],[object Object],[object Object],[object Object],Recorded investment in financing receivables Recorded investment in financing receivables by portfolio segment and disaggregated on the basis of impairment method

CREDIT QUALITY INDICATORS - BY CLASS Previous requirement New requirement None ,[object Object],[object Object],[object Object],[object Object]

NONACCRUAL AND PAST DUE LOANS – BY CLASS Previous requirement New Requirement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Same disclosures required by class of financing receivables except that the disclosures of the accounting policy for charging off uncollectible receivables is required by portfolio segment Recorded investment in receivables on nonaccrual status Now required by class of financing receivables Recorded investment in receivables past due by 90 days or more and still accruing Now required by class of financing receivables None An entity shall provide, by class of financing receivables, an analysis of the age of the recorded investment in loans that are past due at the end of the reporting period.

IMPAIRED LOANS – BY CLASS Previous requirement New requirement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

TROUBLED DEBT RESTRUCTURINGS Previous requirement New Requirement ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

TROUBLED DEBT RESTRUCTURINGS (CONTINUED) ,[object Object],[object Object],[object Object],[object Object]

TROUBLED DEBT RESTRUCTURINGS (CONTINUED) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Illustrations of new Disclosure Requirements ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

SAMPLE FOOTNOTE DISCLOSURE ,[object Object]

NCUA REGULATORY AND CALL REPORTING CONSIDERATIONS ,[object Object],[object Object],[object Object]

IMPACT ON FINANCIAL RATIOS ,[object Object],[object Object],[object Object],[object Object]

IMPLEMENTATION CONSIDERATIONS ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

IMPLEMENTATION CONSIDERATIONS (CONTINUED) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

SAMPLE ALLL COMPUTATION ,[object Object],[object Object],[object Object],[object Object],[object Object]

SAMPLE MBL MATRIX ,[object Object]

SAMPLE QUALITATIVE & ENVIRONMENTAL FACTORS (Q&E) REVIEW ,[object Object]

SAMPLE TDR POLICY MONITOR ,[object Object]

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