Part of the preparation process entails gathering the necessary documentation you will need throughout the ALLL calculation and at the time of the exam. Sources of documentation will be both internal and external. For instance, for your FAS 114 (ASC 310-10-35) calculations, you will need to have updated appraisals and/or updated documentation supporting the expected monthly payments for your impaired loans. This information will be drawn largely from “internal” sources. Conversely, for the qualitative and environmental portion of the ALLL, you will likely draw from external sources, such as Federal Reserve Economic Data.
It is best practice to have these sources readied before the commencement of the calculation. If institutions wait until the calculation is underway to ready their documentation, they may run into bottlenecks and delay the calculation as a whole.
Related Asset - Whitepaper:
Collateral Valuation and Documentation
Collateral Valuation and Documentation - Download the PDF