Allowance for Loan and Lease Losses (ALLL). The ALLL, sometimes referred to as the loan-loss reserve, is a general reserve account maintained by financial organizations to absorb loan losses. Regardless of how well a bank’s lending is done, the bank will have loan losses. Unexpected events may disrupt even the most reliable borrower’s plans, and the result is some amount of loss for a bank. To absorb these losses, the bank maintains the allowance for loan and lease losses.

With all financial institutions now required to maintain their ALLL in compliance with FASB 5 and FASB 114, changes in administrative procedures may be required.

To learn more about Allowance for Loan and Lease Losses: Contact Us!


Comments Off