Volume 2, No. 6

 

New Rules For Impaired Loan Accounting By Creditors:  Up until now, different financial institutions employed different methods for determining the value of an impaired loan. Financial statement comparability between essentially similar financial institutions suffered as a result. The FASB's new standard on creditor accounting for impaired loans goes a long way towards improving this reporting, but creates some new comparability problems of its own. Analysts can compensate for these comparability problems in the area of bad-debt expense, but wind up short of information when it comes to interest income or loan impairment methodology.

Comments are closed.

Powered by WordPress. Designed by WooThemes