A principal supply of steering on accounting for impairment in a mortgage portfolio below gaap, accounting requirements codification subtopic 310-10 was previously often known as the assertion of economic accounting requirements no.
114 (fas 114), “accounting by collectors for impairment of a mortgage”. Under fas 114, a mortgage is impaired when it’s possible that the financial institution might be unable to gather all quantities due (together with each curiosity and principal) in keeping with the contractual phrases of the mortgage settlement.
Fas 114 applies to all loans besides:. – giant teams of smaller-balance homogeneous loans which can be collectively evaluated for impairment (akin to bank card, residential mortgage, and client installment loans) and which haven’t been restructured as troubled debt.