ALLL estimating is one of the most difficult and one of the most crucial techniques that there is to master. The risks involved are grave.  A material overstatement or understatement of the ALLL balance at your institution could be a material distortion of an institution’s financial statements.  If this distortion is unintentional, the misstatement would be considered an error.  However, if the distortion is intentional, the misstatement would be considered a fraud.

Sheshunoff makes it easier to stay compliant with our digital format Sheshunoff | Pratt Bank Compliance Now. You can access Guidance for Estimating the ALLL: Requirements and Procedures, the entire manual from A to Z on a completely online format that is easy to use and includes access to all the checklists and tools for your institution.

The Guidance for Estimating the ALLL: Requirements and Procedures digital experience will let you:

• Easily access proven ALLL guidance and checklists online from any location
• Quickly find exactly what you need with our powerful search engine and filter search system – search by topic, keyword or date range
• Immediately use tools and forms
• Create Research Folders where you can save chapters and tools for instant access each time you log in
• Always have the latest version of your manual on file with ongoing, instant updates
• Ask the Expert and receive a response back within one business day!

This online resource will help you understand recent updates to GAAP rules including expanded disclosures required in financial statements related to credit quality.  These expanded disclosures are designed to help shareholders and other interested parties to identify whether deteriorating credit quality conditions are adequately incorporated into the periodic loss accrual adjustments to your institution’s ALLL balance.

Given the risks related to making adequate and supportable loss accruals at financial statement reporting dates, you need to ensure that all involved with the loss accrual process are well informed about GAAP and regulatory guidance related to compiling an ALLL estimate.  If a regulatory examiner believes that management has not adequately developed a prudent, well documented ALLL estimate, the examiner can recommend an ALLL estimate that may result in the need for a significant loss accrual adjustment.  

Guidance for Estimating the ALLL: Requirements and Procedures is designed to help you meet regulatory expectations and comply with GAAP and regulatory guidance when compiling your ALLL estimate. This digital resource offers tried-and-true methods to protect against losses while meeting regulatory and accounting requirements, and each chapter covers a specific and important part of ALLL estimation procedures and methodologies that are needed to ensure compliance with GAAP and regulatory guidance.

You’ll find that Guidance for Estimating the ALLL: Requirements and Procedures provides tools, techniques, and best practices for ALLL estimating in a digital format that allows you to access your tools no matter where you are. And given the threat that estimating errors poses to the survival of your bank, can you really afford not to have this resource in your hands?

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About Gary M. Deutsch

Gary M. Deutsch is the founder and president of BRT Publications LLC. BRT develops research, education and training materials to help industry professionals effectively manage risks while complying with laws and regulations. Gary has trained thousands of financial institution professionals in all aspects of risk management and has written numerous books in the U.S. and Europe on topics such as credit risk, internal audit and compliance with Generally Accepted Accounting Principles. Gary has extensive risk management and internal audit experience through his association with financial institutions of all sizes as well as through his role leading the KPMG financial institution consulting practice in the Mid-Atlantic region. Gary 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