Many banks are unprepared for changes in accounting standards next year on how to calculate losses on their loans and leases, according to a new survey.
The survey, by the financial information company Sageworks and SourceMedia Research, polled 236 banking and credit union executives with a role in credit risk management who are also subscribers to Accounting Today’s sister publication American Banker. The results indicated that the majority of banks are not currently prepared to meet the requirements of a proposed model from the Financial Accounting Standards Board, which would mandate how banks calculate their allowance for loan and lease losses, or ALLL, a balance-sheet reserve for expected credit losses.
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