Measuring Impaired Loans

Financial Institutions Gain Control of Accounting for Troubled Loans

Client Description

Two New England financial institutions in need of additional help on accounting for certain impaired loans.

Problem/Issue

FASB's requirements for accounting for troubled loans were not clear and both institutions needed to properly account for their impaired loans.

BerryDunn's Solution/Approach

 BerryDunn advisors:

• Reviewed a few of the loans and worked with bank officials during the engagement to transfer the knowledge through hands-on experience

• Provided a methodology that was easy to use that would allow each bank to conduct a systematic analysis in the future for evaluating and accounting for impaired loans.

Outcomes:

By providing a specific process and documentation requirements for each bank to use, the bank's employees no longer struggled with interpreting the concepts and regulations and they gained control over a key portion of their accounting practices.