Allowance for Loan and Lease Losses


Also found in: Acronyms.

Allowance for Loan and Lease Losses

A contra-account on the balance sheet used for offsetting losses on loan and lease assets.
References in periodicals archive ?
It is believed that banks have used earnings management in the past and in the lead up to the 2008 financial crisis by manipulating the allowance for loan and lease losses account on the balance sheet.
MANY INTERESTED PARTIES are concerned about the adequacy of depository institutions' (DIs') allowance for loan and lease losses (ALLL) and the timing of these provisions.
One of the defining regulatory statements on the ALLL, the 2006 Interagency Policy Statement on the Allowance for Loan and Lease Losses states, "The ALLL represents one of the most significant estimates in an institution's financial statements and regulatory reports .
A banking institution shall account for an ATRR separately from the Allowance for Loan and Lease Losses, and shall deduct the ATRR from "gross loans and leases" to arrive at "net loans and leases.
For further guidance, institutions should refer to the July 12, 1999, Joint Interagency Letter to Financial Institutions on the allowance for loan losses, as well as the December 1993 Interagency Policy Statement on the Allowance for Loan and Lease Losses.
FFIEC Interagency Policy Statement on the Allowance for Loan and Lease Losses Methodologies and Documentation for Banks and Savings Institutions.
Full browser ?