Assembling Appropriate ASC 450-20 (FAS 5) Pools

Jan 15, 2015

This brief video touches on the topic of segmentation within the ASC 450-20 (FAS 5) portion of the ALLL calculation. While generally the more granular an institution gets, the more defensible the calculation is in the eyes of examiners, there certainly is a tipping point. Institutions must maintain statistical relevancy and ensure that they do not over-segment their pools. Finding a good balance can help institutions to gain more insight into their portfolio, have a more concise calculation and be better equipped to defend their methodology to auditors and examiners.