If you are audited, reversing a provision to flip from net loss to net income

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Nov 18, 2024
9:25:05pm

UNLVcougar Intervention Needed

If you are audited, reversing a provision to flip from net loss to net income

will trigger all kinds of red flags and scrutiny. Just giving you a heads up now.

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UNLVcougar

Bio page: UNLVcougar
Joined: Oct 3, 2001
Last login: Nov 18, 2024
Total posts: 57,223 (2,283 FO)

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Messages

Author

Time

Accounting Question: Allowance for losses

ToasterChive All-American

6:31pm

It’s called a reverse provision, and yes, you can do it, but you better have

UNLVcougar

6:39pm

How would you enter it in? One time reverse provision?

6:44pm

Yes, this is correct. If your current expected credit losses goes down, you

ForzaPuma

7:15pm

Is there any literature that would support this?

6:56pm

Is this a reserve for loan losses or a reserve on accounts receivable? If it’s

UNLVcougar

8:27pm

Also, I’ll add under the new reserve guidance in ASC 326 which is meant to

UNLVcougar

8:28pm

The entity is private and is a reserve for loan losses.

8:57pm

Are you using an estimated lifetime losses calculation?

UNLVcougar

9:07pm

Yes and it’s way too high. We’re going to miss net income target and want to move funds from loss provision to income.

9:21pm

If you are audited, reversing a provision to flip from net loss to net income

UNLVcougar

9:25pm

We’ve been way under on losses compared to loss provisions. I thought you said it was possible?

9:33pm

Yes. It’s possible. I’m just telling you when you reverse a provision and it

UNLVcougar

10:37pm

What’s your average contractual life of your loans?

UNLVcougar

10:38pm

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