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Calculating and Documenting the Allowance for Loan and Lease Losses (ALLL) Webinar

The Allowance for Loan and Lease Losses (“ALLL”), is a major portion of credit administration and is considered a key factor in maintaining a safe and sound financial institution. It is a valuation reserve established and maintained by charges against the financial institution’s operating income and is estimate of loans that may be uncollectible. According to the rules of calculating the ALLL, a provision to the ALLL should only be made if the chances of a financial institution incurring a loss is probable and estimable. The ALLL is used to reduce the book value of loans and leases to the amount that is expected to be collected.

This program is designed to review the elements and thought process in establishing and maintaining an adequate ALLL level under the new guidance. Regulators are just as interested in your financial institution’s methodology in calculating the ALLL in addition to the adequacy. The Allowance is watched not only by the major agencies responsible for supervision of the banking system, but also by the American Institute of Certified Public Accountants, the Internal Revenue Service and the Securities & Exchange Commission. All have similar but yet, conflicting perspectives on how much of an allocation should be contained in the ALLL.

Covered Topics:

  • Establishment and Purpose of the ALLL
  • Loan Grading and the impact on the ALLL
  • General Framework required to establish the ALLL
  • Review of Regulators expectations for the ALLL as set forth in:
    • FASB ASC 450-20 Contingencies – Loss Contingencies (formerly FASB 5 – Accounting for Contingencies)
    • FASB ASC 310-10-35-2 through 30, Receivables-Overall-Subsequent Measurement-Impairment (formerly FASB 113 – Accounting by Creditors for Impairment of a Loan)
    • Interagency Policy on the ALLL issued in 2006 which revises the Policy issued in December 1993
    • FFIEC Policy Statement on the ALLL Methodologies & Documentation
    • Reinforce Concepts with Allowance Calculation Cases

After completing this course, the participant will have an enhanced understanding of the importance of creating and maintaining an adequate Allowance that is legally defensible and insures the bank is operating in a safe and sound environment.

Who Should Attend:

CEO’s, Presidents & Board Members, Credit Administrators, Senior Credit Officers, Loan Review Officers, Compliance Officers, Senior Loan Officers, Commercial/Consumer Loan Officers, Loan Operation Officers, Loan Administrators

ICB Credit: 2.5 CLBB, CPB, CRCM Continuing Education Credits

Presenter:  Jeffery W. Johnson

 


Schedule and Registration Information

Choose the delivery type that best suits your needs.  Tuition includes textbook (if applicable).
Webinar times are EST.  All other class times are local time.

Delivery Type Start Date End Date Start Time End Time Location Tuition
Webinar05/09/12 Archived Audio CD Recording $285.00Order
Webinar05/09/12 Archived Six Month On-Demand Recording $255.00Order
In-House Any Submit Request