allowance for doubtful accounts

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Allowance for Doubtful Accounts

Extra funds from sales, or another source, set aside in order to pay off bad debt if and when it arises. The allowance helps a company ward off any potential cash flow problems should its credit sales not be repaid as expected. On financial statements, it is important to note that an allowance for bad debts exists for fiscal conservatism and not because one expects a large amount of bad debt to accumulate. An allowance for doubtful accounts is also called a cushion. Banks call these funds the loan loss reserve. See also: Savings account.
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allowance for doubtful accounts

A balance-sheet account established to offset expected bad debts. If a firm has made a sufficient provision in its allowance for doubtful accounts, reported earnings will not be penalized by bad debts when the bad debts occur. If uncollectible accounts are larger than expected, however, the firm will have to increase the size of the account and reduce reported income. Also called allowance for bad debts, reserve for bad debts.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.
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Loan Loss Reserve Ratios Loan Loss Loan Loss Allowance/ Allowance/ Nonperforming Total Total Loans Loans Loans (*) DeWitt Bank & Trust 6.63% 9.415.38% $36,926 Allied Bank, Mulberry 5.15% 31.25% $48,363 First Arkansas Bank & Trust, Jacksonville 4.01% 78.11% $413,494 Helena National Bank 3.36% 230.41% $64,130 First Delta Bank, Marked Tree 2.94% 191.83% $16,780 First Security Bank, Searcy 2.91% 473.44% $2,035,902 Central Bank, Little Rock 2.85% 0% $63,094 Heartland Bank, Little Rock 2.83% 17.42% $183,170 Little River Bank, Lepanto 2.81% 40.58% $10,960 Pinnacle Bank, Rogers 2.79% 330.7% $43,998 (*) In thousands.
Loan loss models vary bank-by-bank
Verifying the appropriateness of the loan loss reserve account during examinations typically involves a significant amount of examiner judgment and discretion.
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The net loan loss reserve build in the first quarter 2016 was $80 million, compared to a net loan loss reserve release of $98 million in the prior year period, reflecting the deterioration of energy-related commercial loans and continued stabilization of consumer credit.
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In addition to the office buildings, BlackRock noted a $12.2 million loan loss reserve on a $20.5 million mezzanine loan used to finance a 1,802-unit apartment complex in the city, according to an Anthracite Capital annual report filed March 18 with the SEC.
BlackRock loses millions on Macklowe loans
increased, the coverage of overdue loans with loan loss reserves declined
Moody's downgrades ATF Bank's deposit and debt ratings
capital or loan loss reserve increase to absorb losses.
Moody's downgrades Promsvyazbank's ratings to Ba3
The loan loss reserve rose to USD35.3m, or 1.98% of total loans, from USD25.5m, or 1.44%.
Community Bank net profit climbs 43% Y/Y Q1 '10
The bank stressed that its results were dragged down mainly by additions to its loan loss reserve, an unexpected rise in FDIC Deposit Insurance premiums and spending on its expansion last year.
Security Bank of California swings to net loss in 2009
Virtually all of AvalEoACAOs pre-provision income was set aside as loan loss reserve, up 1ppts q/q to 29.8% of gross loans in 2Q11.
Raiffeisen Bank Aval earnings
However, PremierWest Bancorp managed to boost its loan loss reserve to USD45.9m at the end of the period under review, which is close to 4% of its loans.
PremierWest Bancorp net loss widens to USD110.6m '09
Loan quality continues to improve as the bank's total loan loss reserves skyrocketed from KD 32.6 million to KD 41.9 million, an increase of 29%, Gulf Bank's Chairman Omar Al-Ghanim said in a press statement.
Gulf Bank posts net profit of KD 20.7 mln for first half of 2016
coverage of impaired large corporate loans by loan loss reserves was
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