What Are ASC 310-10-35 (FAS 114) Loans?
Jan 21, 2015
Effective loan classification is a must for an effectively calculated ALLL. In this video, a Sageworks consultant describes the parameters guidance sets out to identify an ASC 310-10-35 (FAS 114) loan. Typically these loans are evaluated individually and a fair market value of collateral or a present value of future cash flow analysis will be conducted to determine the loan's value.
The ASC 310-10, or as it’s been more commonly known as the FAS 114, are loans that can be specifically identified as being impaired. The expectation is that the creditor will not fully realize the loan – that’s including the principal and interest. In this, the loan must be evaluated for individual impairment. Typically a collateral or a cash flows methodology is applied to determine what the loss reserve will be.