This important webinar will address critical issues such as determining when a loan is impaired and the right time to apply impairment accounting.
Background
Loan officers should be held accountable for the credit risk inherent in the loans they originate. Ideally, your compensation program will include rewards for keeping loan losses in check and not just for putting more loans on the books. In addition to loan officer compensation programs, your credit risk management function has to maintain watch lists, conduct loan reviews and update risk ratings.
These credit risk management efforts should lead to early warning signs of deteriorating credits and the need to identify loan impairments. However, it became apparent after the Great Recession that although many institutions had credit risk management programs in place, they still missed identifying impaired loans in a timely manner. Maybe they were being too optimistic that their borrowers would recover and impairment accounting would not be needed. Or possibly they needed to gain a better understanding of the GAAP and regulatory expectations for identifying and accounting for impaired loans.
This important webinar will address issues such as:
• How do you determine when a loan is impaired?
• When do you need to apply impairment accounting?
Unfortunately, the answers to these questions are often not clear. Yet you need clarity and a well-defined approach to impairment identification or you risk missing earnings goals and breaching the Board’s risk tolerances.
Agenda
• Identifying impairment triggers
• Determining if and when impairment accounting is required
• Identifying where impairment estimates are included in financial reports
• Estimating the amount of impairment under GAAP
• Determining when and how often you need to update impairment estimates
• Preparing for changes coming to the impairment estimation process under the FASB’s proposal
Benefits
Following this session, you’ll be able to:
• Develop agreement on when a loan is impaired
• Utilize loan classification and credit grading systems as early warning systems for credit quality deterioration that could lead to impaired loans
• Determine when impairment accounting is required in your institution’s financial statements and regulatory reports and how to estimate the amount of impairment.
• Understand the specific criteria under GAAP and Regulatory requirements for calculating impaired loans including collateral dependent loans and troubled debt restructurings (TDRs).
• Develop effective documentation of impairments for the ALLL estimation process
Who Should Attend
• Chief Risk Officer
• Credit Risk Managers
• CFO
• Controller