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In banking, the Allowance for Loan and Lease Losses (ALLL), formerly known as the reserve for bad debts, is a calculated reserve that financial institutions establish in relation to the estimated credit risk within the institution's assets.
In finance, bad debt, occasionally called uncollectible accounts expense, is a monetary amount owed to a creditor that is unlikely to be paid and for which the creditor is not willing to take action to collect for various reasons, often due to the debtor not having the money to pay, for example due to a company going into liquidation or insolvency.
The amount of the bad debt provision can be computed in two ways, either (1) by reviewing each individual debt and deciding whether it is doubtful (a specific provision); or (2) by providing for a fixed percentage (e.g. 2%) of total debtors (a general provision). The change in the bad debt provision from year to year is posted to the bad debt ...
The Pre-Tax Provision Method provides a single ratio that expresses overall debt service capacity reliably given these challenges. Debt Service Coverage Ratio as calculated using the Pre-Tax Provision Method answers the following question: How many times greater was the company's EBITDA than its critical EBITDA value, where critical EBITDA is ...
One of the many variables lenders use when deciding whether or not to loan you money is your debt-to-income ratio or DTI. Your DTI reveals how much debt you owe compared to the income you earn ...
In financial accounting under International Financial Reporting Standards (IFRS), a provision is an account that records a present liability of an entity. The recording of the liability in the entity's balance sheet is matched to an appropriate expense account on the entity's income statement .
the "bad debt expense" associated with portion of the receivables that the seller expects will remain unpaid and uncollectable, the "factor's holdback receivable" amount to cover merchandise returns, and (e) any additional "loss" or "gain" the seller must attribute to the sale of the receivables.
The core of the deal is a suspension of the debt ceiling — currently at $31.4 trillion — until Jan. 1, 2025. The Treasury Department could then use "extraordinary measures" to pay the bills ...