How would the staff normally expect Registrant G to adequately document a loan loss allowance under FASB ASC Subtopic 450-20 for these loans that were individually reviewed for impairment but are not considered individually impaired?
Interpretive Response: The staff normally would expect that, as part of Registrant G’s effective loan loss allowance methodology, it would document its decision to include its loans to Company Y and Company Z in its determination of its loan loss allowance under FASB ASC Subtopic 450-20.60 The staff also normally would expect that Registrant G would document the specific characteristics of the loans that were the basis for grouping these loans with other loans in Segment 1 and Segment 2, respectively.61 Additionally, the staff normally would expect Registrant G to maintain documentation to support its method of estimating loan losses for Segment 1 and Segment 2, which typically would include the average loss rate used, the analysis of historical losses by loan type and by internal risk rating, and support for any adjustments to its historical loss rates.62 The registrant would typically maintain copies of the economic and other reports that provided source data. When measuring and docu
Related Questions
- In the staff’s view, what aspects of a registrant’s loan loss allowance internal accounting control systems and processes would appropriately be addressed in its written policies and procedures?
- Did the Covered Defect in the Covered Document Directly Cause the Claimed Loss under Insuring Agreement D & E?
- What is a legal loan document?
