New and Expanded Disclosure Requirements for Nonpublic Financial Institutions are Effective for Annual Reporting Periods Ending On or After December 15, 2011.

The Great Recession left users of banking institution financial statements needing more in-depth information about credit quality and loan losses.  In response, the FASB updated the Accounting Standards Codification (ASC) to expand financial statement disclosures to provide greater transparency about an institution's allowance for loan and lease losses (ALLL) and the credit quality of its financing receivables including information about nonaccruals, past due loans, troubled debt restructurings and loan purchases and sales.

Accounting Standards Update 2010-20, Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, focuses on the following areas:

1. The nature of credit risk inherent in a financial institution's portfolio of financing receivables
2. How that risk is analyzed and assessed in arriving at the allowance for credit losses
3. The changes and reasons for those changes in the allowance for credit losses.

To meet the new requirements, institutions have to provide new and expanded disclosures on a “disaggregated” basis covering both “portfolio segments” and “classes of financing receivables” related to credit quality.  For nonpublic financial institutions, the disclosures are effective for annual reporting periods ending on or after December 15, 2011.

This important and timely webinar provides guidance for implementing the FASB disclosure requirements and determining the appropriate level of disaggregation of information.  In addition to the following learning objectives, we will discuss the appropriate GAAP and regulatory requirements related to the ALLL so attendees can coordinate the development of disclosures with their ALLL estimation process.

• Determining what receivables must be included in disclosures and which ones can be excluded
• Identifying portfolio segments and classes of financing receivables
• Describing your institution’s accounting policies and methodology for estimating the allowance for credit losses
• Describing your impairment methodology
• Documenting the nonaccrual status of financing receivables including impaired financing receivables
• Developing credit quality indicators of financing receivables
• Determining the nature and extent of troubled debt restructurings and their effect on the allowance for credit losses
• Determining the nature and extent of financing receivables modified as troubled debt restructurings that defaulted and their effect on the allowance for credit losses
• Identifying significant purchases and sales of financing receivables

Sheshunoff interactive webinars are 90 minutes long and include a 30-minute Q&A session with the expert so you may ask questions specific to your institution. Handouts are made available 48 hours prior to the conference and certificates of attendance may be requested for all attendees. While webinars may be attended in an audio-only format, we encourage you to take advantage of the interactive features in the webinar. 

About Gary M. Deutsch

Gary M. Deutsch has worked extensively in management positions with both regional financial institutions and community banks in audit, lending, financial, and operational areas. He served as a KPMG financial institutions consulting practice leader in the Mid-Atlantic region delivering strategic planning, profit improvement, financial management, and merger- and acquisition services. Mr. Deutsch is the founder and president of BRT Publications LLC, a professional education and training company serving the financial industry for over ten years. In this capacity he has written numerous publications for Sheshunoff and A.S. Pratt on topics such as risk management, credit management, asset and liability management, and accounting and internal auditing. He also conducts audio conferences and webinars on current issues related to these topics. Mr. Deutsch is a licensed CPA in Maryland and has a B.A. in accounting and an MBA in finance from Loyola University Maryland. He has also achieved the Certified Management Accountant, Certified Internal Auditor, and Certified Bank Auditor designations. See all works by Mr. Deutsch