G reit liquidating trust grantor letter
If a loan has been individually evaluated for impairment in accordance with FASB ASC Topic 310-10; formerly SFAS No.
114, it generally would not also be subject to evaluation as part of a homogenous pool under FASB ASC Topic 450-20; formerly SFAS No. If, however, the FASB ASC Topic 310-10; formerly SFAS No.
In addition, TALF loans and loans extended to consolidated LLCs that are recorded at fair value do not require an allowance for loan loss.
In accordance with FAM 1.06, Reserve Banks are required to accrue a loss on a loan when it is probable that the loan will be not be collected in full and when the amount of loss is reasonably estimable. 5 address evaluating loan losses and impairments in loan portfolios.
The estimated costs to sell, on a discounted basis, should be considered in the measure of impairment if those costs are expected to reduce the cash flows available to repay or otherwise satisfy the loan.
The Bank can, however, measure impairment of a loan by reference to the market price of the loan, when a secondary market price exists for the loan.The Bank should consider potential recovery from third-party guarantors such as FDIC, other government agencies, or bond insurance.Additional recourse to consider is the ability to debit the borrower's account with the Federal Reserve.The measurement method for an individual impaired loan, however, should be applied consistently to that loan and a change in method should be justified by a change in circumstances.Based on reasonable and supportable assumptions and projections, the Bank must exercise significant judgment to develop the best estimates of expected future cash flows.
114 evaluation does not consider all of the risk characteristics that apply to a pool of loans in the aggregate (but not to individual loans), such as industry and concentration risk, it may be necessary to also include the loan in the FASB ASC Topic 450-20; formerly SFAS No. The following diagram provides an illustrative decision tree for evaluating the need to record impairments or loan losses as of the evaluation date.