FASB issues new disclosure requirements for offsetting for offsetting assets and liabilities
Jan. 9, 2012
The Financial Accounting Standards Board (FASB) recently issued new disclosure requirements for companies that "offset" certain assets and liabilities on their financial statements. Accounting Standards Update (ASU) 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities, includes less strict requirements for offsetting (or "netting") than those the FASB had been considering along with the International Accounting Standards Board (IASB). Full Story
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Conformity election may prove beneficial for banks
Dec. 20, 2011
In general, a deduction is allowed under Internal Revenue Code (IRC) § 166 for any debt which becomes worthless within the taxable year, however, no precise test exists for determining whether a debt is worthless. In many situations, no single factor or identifiable event clearly demonstrates whether a debt has become worthless. Instead, a series of factors or events in the aggregate establishes whether the debt is worthless. Full Story
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FFIEC issues supplement to 2005 guidance on internet banking risks
Dec. 20, 2011
As a result of an increasing number of cyber attacks and losses due to fraudulent activity to banking institutions and customers, the FFIEC has issued its first online authentication guidance since 2005. Banking regulators will begin assessing institutions by this new guidance in 2012. Full Story
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FASB to evaluate fair value measurement disclosures for private companies, not-for-profits
Dec. 16, 2011
The Financial Accounting Standards Board (FASB) has added to its agenda a project to assess the feasibility of reducing or eliminating certain fair value measurement disclosure requirements for private companies and not-for-profit organizations, a move that could prove positive for community banks. Full Story
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Wynne E. Baker receives prestigious national accounting award
Oct. 5, 2011
Wynne E. Baker, member-in-charge of the KraftCPAs banking industry team, received the Sustained Contribution Award given by the American Institute of Certified Public Accountants (AICPA) at its Governing Council meeting on Oct. 17. Full Story
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How to handle OREO-related expenses
Oct. 7, 2011
Banks typically refer to foreclosed real estate as "OREO property" -- an acronym for "other real estate owned." OREO property typically is property obtained by the bank due to the inability of the borrower to make the loan payments as agreed. Due to the downturn in the economy, many banks have seen a substantial increase in the amount of property they own. As a result, we thought it would be a good idea to re-visit the treatment of items related to OREO property for income tax purposes. Full Story
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FASB issues simplified standard for goodwill impairment testing
Oct. 5, 2011
FASB has issued revised standards for goodwill impairment testing. The amendments — found in Accounting Standards Update No. 2011-08, Intangibles — Goodwill and Other (Topic 350): Testing Goodwill for Impairment — are intended to make the process easier and less costly. This article details how companies now have the option of performing a qualitative assessment to determine whether it's necessary to conduct the quantitative two-step test. Full Story
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FASB issues new guidance for presentation of other comprehensive income
July 11, 2011
The Financial Accounting Standards Board (FASB) has issued new guidance for how public and private companies must present other comprehensive income (OCI) and its components in their financial statements. The guidance applies to all companies that report items of OCI but perhaps is most relevant for companies that have historically presented components of OCI as part of their statement of changes in stockholders' equity — an option that's no longer available under this guidance. Full Story
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FASB issues new standards for fair value measurement and disclosures
May 19, 2011
In conjunction with the International Accounting Standards Board (IASB), the Financial Accounting Standards Board (FASB) on May 12 issued new standards for public and private companies on fair value (FV) measurement and disclosures. Most companies will see little change in how they measure fair value, but they may need to make more extensive disclosures about the processes and assumptions behind those measurements. Full Story
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FASB issues accounting standards update on troubled debt restructuring
May 19, 2011
Over the past few years, creditors have increasingly been required to restructure or modify loans to prevent defaults. Concessions may include granting an interest rate below market for the risk characteristics of the loan, reducing principal or accrued interest amounts, or requiring additional collateral or guarantees. Not all creditors account for restructured or modified loans the same way. Full Story
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IRS releases final regulation requiring corporate disclosure of uncertain tax positions
March 7, 2011
The IRS recently issued a final regulation that marks the culmination of its efforts to require certain corporations to submit information related to uncertain tax positions along with their income tax returns, beginning with 2010 returns. The new requirements represent a significant shift in the extent of information corporations filing Forms 1120, 1120-F, 1120-L or 1120-PC must disclose to the IRS. S corporations are exempt from this new IRS requirement even though reserves for uncertain tax positions may be reflected on their financial statements. Full Story
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FASB and IASB have reached agreement on accounting for losses on bank loans
March 4, 2011
In January, 2011, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) agreed to propose for comments a single approach for accounting for impaired loans or other troubled financial assets. The FASB and the IASB have published a supplementary document that explains the appropriate accounting for impaired financial instruments. The proposal is a major change from the current accounting treatment, the "incurred model," which states that an event must have already happened in order to record a loss. Full Story
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Greater expectations make ERM a critical management function
Feb. 2, 2011
The process of enterprise risk management (ERM) is again a hot topic and on the radar of the regulatory agencies. Attention to the process resurged with the passing of Sarbanes-Oxley legislation in 2002 and the subsequent issuance of the Enterprise Risk Management – Integrated Framework report by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2004. The recent global credit and liquidity crisis demonstrated the importance of effective risk management to banks engaging in an unpredictable, volatile, and complex business world. An ERM process is an important function that is useful in steering a bank toward success in an ever-changing business environment. Full Story
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New accounting for loan participation and other partial loan sales impacts community banks
Sep. 17, 2010
FASB has made an accounting standards change which modifies the accounting for transfers and servicing of financial assets. The standard, Accounting Standards Codification (ASC) Topic 860 (formerly Statement of Financial Accounting Standards (FAS) 140 and 166), introduced a new definition for "participating interest", which could have a significant impact on some community banks. Full Story
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FASB issues Update No. 2010-20 and offers related webinar registration
Sep. 14, 2010
Accounting Standards Update No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, was issued today. The standard will help investors assess the credit risk of a company's receivables portfolio and the adequacy of its allowance for credit losses held against the portfolios by expanding credit risk disclosures. Full Story
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S.A.F.E Act national registration finalized
Sep. 10, 2010
On July 28, the federal banking agencies issued final rules requiring residential mortgage loan originators who are employees of national and state banks, savings associations, Farm Credit System Institutions, credit unions, and certain of their subsidiaries to meet the registration requirements of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (S.A.F.E. Act). Even though Tennessee has exempted employees of agency-regulated institutions, including their subsidiaries, from state registration, the federal registration rules will still apply. Full Story
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FASB issues update No. 2010-20 and offers related webinar
July 23, 2010
Accounting Standards Update No. 2010-20, Receivables (Topic 310): Disclosures about the Credit Quality of Financing Receivables and the Allowance for Credit Losses, was issued recently. The standard will help investors assess the credit risk of a company's receivables portfolio and the adequacy of its allowance for credit losses held against the portfolios by expanding credit risk disclosures. Full Story
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Basic FDIC Insurance Coverage Permanently Increased to $250,000 Per Depositor
July 23, 2010
On July 21, 2010, President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which, in part, permanently raises the current standard maximum deposit insurance amount to $250,000. The standard maximum insurance amount of $100,000 had been temporarily raised to $250,000 until December 31, 2013. The FDIC insurance coverage limit applies per depositor, per insured depository institution for each account ownership category. Full Story
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Mergers and acquisitions: will 2010 be the right time?
April 21, 2010
Many U.S. business owners, investors, and managers were pleased to see 2009 draw to a close. However, for those with strong balance sheets, access to capital, and a desire to expand through acquisitions, 2009 was a very good year indeed. Full Story
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Community banks facing escrow woes
April 14, 2010
As banks gear up for the new Truth in Lending Requirements under the Mortgage Disclosure Improvement Act (MDIA), there are many factors to consider -- not the least of which is what to do about escrowing. MDIA, which was passed in 2008, requires escrowing of loans identified as higher priced loans (APR exceeds 1.5 percent first lien and 3 percent subordinate lien greater than the Average Prime Offer Rate) when the loan is secured by the consumer's principal dwelling. Full Story
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New Disclosure Requirements for Fair Value Measurements
April 14, 2010
This past January the Financial Accounting Standards Board ("FASB") issued Update No. 2010-06 (Improving Disclosures about Fair Value Measurements) (the "Update") to the FASB Accounting Standards Codification Topic 820 (Fair Value Measurements and Disclosures). This update effects most banks and will require enhanced disclosures in their financial statements. While this article is not an all encompassing summary of the update, the following highlights some of the significant matters that will readily affect financial institutions. Full Story
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Limit on deductibility of executive compensation lowered for TARP participants
Feb. 26, 2010
New executive compensation rules apply to entities participating in the troubled asset purchase programs established under the Emergency Economic Stabilization Act (EESA) of 2008. The Treasury has established the Troubled Assets Relief program (TARP). If your institution is a TARP participant, the deductibility of salaries and severance payments made to your "senior executive officers" (SEOs) may be limited. Full Story
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Increased Capacity of Financial Institutions to Acquire 2009 and 2010 Bonds
Feb. 16, 2009
Of significance to many financial institutions, the American Recovery and Reinvestment Act of 2009, passed last week by Congress, expands the exceptions to the rules imposed on financial institutions which limit their ability to deduct the interest expense attributable to holding tax-exempt bonds. Full Story
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Attention Banks - Accounting for Warrants
Feb. 11, 2009
Accounting for warrants issued in conjunction with the United States Treasury Department's Capital Purchase Program (CPP) Full Story
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