Accurately determining appropriate allowances for loan loss reserves in accordance with FAS 5

Significant number of resources performing manual calculations / reconciliations / data manipulation to achieve results

Review policies and procedures for measuring risk and determining reserve amounts

Identify data and technology needs to address gaps in current process

Implement solution within overall enterprise architecture and governance structure

FAS 5 and FAS 114 implementation experience along with computation of loan loss reserves through predictive forecasting of house price indexes, interest rates and product cash flows

Performing FAS 91 level yield (prospective, retrospective, and contractual) for products with complex cash flows (Option ARMS) and major / minor modifications (residential and commercial)

Dependency on proving immateriality of non-level yield methodologies to auditors, which can become material for high growth firms, and could result in material differences / re-statement of financial earnings

Perform gap analysis on “as-is” state vs. “to-be” state (as defined by proper accounting policies in accordance with GAAP and management information required to run the business)

FAS 91 implementations of retrospective, contractual and prospective amortization methods at more than four publicly traded financial institutions during financial re-statements for residential, commercial and consumer loan and security portfolios

Conducting proper impairment analysis (FAS 114)

Increased probability of a material financial misstatement

Review current policy based on historical success of predicting value deterioration and develop new procedures to address identified gaps and implement solution (people, process, technology, data)

Served as lead for a bank to integrate with third party service providers in support of FAS 114 impairment analysis

Understanding proper accounting treatment of securitizations (sales vs. financing under FAS 140; consolidation vs. derecognition under FIN 46(r))

Misrepresentation of financial position

Work with policy group to define checklist approach towards implementing 140/FIN 46 requirements. Implement procedures towards evaluating current and future deals

Implement technologies to automate procedures and produce exception reporting

At multiple financial institutions, led requirements, testing, and systems implementation for processing securitizations and resulting accounting treatment of loans (consolidation) or securities

Timeliness and accuracy of data feeding systems

Elongated close cycles with higher degree of completeness and accuracy risk

Model 'as-is' data flow from initiation to recordation

Identify 'to-be' state based on best practices

Implement processes and technologies to address gaps in current flow

At multiple financial institutions, led business process re-engineering efforts to reduce accounting close cycles with specific emphasis on data flows and analytics