What does unimpaired by losses mean?
The term “unimpaired by losses” means that the paid-up capital amount and/or working funds shall be maintained at all times and shall not be impaired by any losses.
How is unimpaired capital calculated?
Unimpaired capital and surplus equals shares plus post-closing, undivided earnings.
What is provision for credit losses?
The provision for credit losses (PCL) is an estimation of potential losses that a company might experience due to credit risk. The provision for credit losses is treated as an expense on the company’s financial statements.
What type of account is allowance for loan losses?
contra-asset account
The ALLL is presented on the balance sheet as a contra-asset account that reduces the amount of the loan portfolio reported on the balance sheet.
How do you calculate unimpaired capital and unimpaired surplus?
Unimpaired capital and surplus equals shares plus post-closing, undivided earnings. Unimpaired capital and surplus means the same as “paid-in and unimpaired capital and surplus,” as defined in paragraph (f) of this section. Unimpaired capital and surplus equals shares plus post-closing, undividedearnings.
What are the prudential guidelines?
Prudential Guidelines means any Guideline issued by the Central Bank which is meant to apply to institutions generally.
What is the minimum capitalization of a commercial bank with 6 branches?
Minimum capitalization.
| Bank Category | Required Minimum Capitalization |
|---|---|
| KBs | |
| Head Office Only Up to 10 branches4 11 to 100 branches5 More than 100 branches6 | P2.00 billion 4.00 billion 10.00 billion 15.00 billion |
| TBs | |
| Head Office in National Capital Region (NCR) |
Why do banks make provision for credit losses?
A loan loss provision is an income statement expense set aside to allow for uncollected loans and loan payments. Banks are required to account for potential loan defaults and expenses to ensure they are presenting an accurate assessment of their overall financial health.
Is loss allowance an expense?
Any increase to allowance for credit losses is also recorded in the income statement as bad debt expenses.
What is the difference between loan loss reserve and loan loss provision?
Loan loss provisions are different from loan loss reserves, which are a tally of all the loan loss provisions recorded over several years. And while a loan loss provision is estimated loss, the actual loss, when it comes, is called a net charge-off.
What are unrealized gains/losses?
Unrealized gains and losses (aka “paper” gains/losses) are the amount you are either up or down on the securities you’ve purchased but not yet sold. Generally, unrealized gains/losses do not affect you until you actually sell the security and thus “realize” the gain/loss.
What does unimpaired capital and unimpaired surplus mean?
Unimpaired Capital and Unimpaired Surplus means the amount of total equity capital outstanding as indicated in the bank’s most recent quarterly report of condition and income as filed with the Commissioner of Banking pursuant to W. Va.
What are paper gains and losses?
Calling unrealized gains and losses “paper” gains or losses implies that the gain/loss is only real “on paper.” This is especially important from a tax perspective as, in general, capital gains are taxed only when they are realized, and you can only deduct capital losses on your tax return after they’re realized too.
When do capital gains and losses become realized?
A gain or loss becomes realized when the investment is actually sold. Capital gains are taxed only when they are realized; capital losses can be deducted only when they are realized. What Are Unrealized Gains And Losses?