United States

OCC Issues June 2012 Bank Accounting Advisory Series

The Office of the Comptroller of the Currency (OCC) recently issued the June 2012 edition of its Bank Accounting Advisory Series (BAAS), which addresses several new interpretations:

  • Accounting for a mortgage loan after the borrower files for Chapter 7 bankruptcy and the debt is discharged
  • Impairment measurement considerations for a loan with modified terms that require a balloon payment at maturity
  • Accounting for overdraft fees and overdrawn accounts of a deposit account customer that also has an adversely-classified lending relationship with the bank
  • Considerations related to accounting for purchased credit impaired (PCI) loans under FASB ASC Subtopic 310-30,Receivables - Loans and Debt Securities Acquired with Deteriorated Credit Quality, including whether it is appropriate to aggregate PCI loans with loans that are not individually within the scope of ASC Subtopic 310-30; whether it is appropriate to aggregate PCI loans into pools solely based on collateral type; examples of metrics that can be considered for loan aggregation; and impairment considerations when decreases in expected cash flows are attributable to changes in a variable interest rate index
  • The effect on the allowance for loan losses of borrower-paid private mortgage insurance on an individual loan and bank-obtained mortgage insurance on a pool of loans
  • Timing of the transfer of a loan to other real estate owned (OREO) when the collateral is subject to a redemption period
  • Reporting of OREO properties after conversion into a Low Income Housing Tax Credit project
  • Accounting for disputed insurance claims receivable

Read OCC BAAS - June 2012