Accounting for FDIC-assisted transactions: Acquisition of loans, application of ASC 310-30 and other issues
The number of at-risk and failed banks has increased drastically over the past few years. Many of these troubled banks are being acquired by healthy banks through FDIC-facilitated acquisitions. For qualified institutions, acquisitions of these failed banks present opportunities to grow aggressively. However, accounting for these transactions can be quite complex.
This new white paper, published June 1, tackles the challenges in applying GAAP purchase accounting to the acquisition of loans, including troubled loans, as well as pitfalls for acquirers to avoid and best practices for a smooth acquisition. Topics include:
- Refresher on purchase accounting for loans: New GAAP versus old
- Accounting for loans acquired with deteriorated credit quality
- Recognizing income under ASC 310-30
- Changes in estimates of cash flows
- Pooling of certain acquired loans
Related documents
Troubled bank opportunities: What you need to know about FDIC-assisted transactions An unprecedented increase in bank failures presents opportunities for healthy banks to acquire them through FDIC-assisted transactions. This white paper, updated on March 8, explores the tax, accounting, regulatory and other implications of these transactions.
Accounting and Tax Considerations of Acquiring a "Whole Bank" with an LSA In this Bank Accounting & Finance article, Grant Thornton professionals provide an overview of the accounting and tax considerations related to whole-bank acquisitions with FDIC loss-sharing agreements, including Day One accounting considerations, Day One tax considerations, interaction of subsequent accounting for acquired loans and related LSA indemnification asset and more. For more information about Bank Accounting & Finance, visit www.taxcchgroup.com.
Webcast: Understanding accounting, tax, valuation and FDIC reporting requirements
The second part of the FDIC-assisted transactions webcast series explores the application of ASC 805, loss-share arrangements, valuation, and day one and subsequent tax considerations. Replay it now.
Webcast: Special issues related to purchased assets
Replay Part 3 of our FDIC-assisted transactions series. It addresses purchased assets, from accounting for acquired loans with deteriorated credit quality to identifying total debt restructurings.
What to consider before bidding on a failed bank
For qualified banks and private equity firms, FDIC-assisted acquisitions of failed banks present significant growth opportunities. Listen to Part 1 of the FDIC-assisted transactions series.
