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The following information pertains to Lender A's loan portfolio at December 31, 2020: • Lender A considers all loans over 90 days past due to be credit-impaired based on historical experience with recovering the associated debt. • The aging of Lender A's loans on December 31, 2020 follows: Current More than 30 days past due More than 60 days past due More than 90 days past due P1,400,000 75,000 100,000 125,000 P1,700,000 Total • Lender A monitors certain loans more closely on an individual basis given their significance and unique characteristics. These loans are not included in the P1,700,000 loan portfolio. The following information is available without undue cost or effort on an individual loan basis: Loan Amount Past Due Status PV of Expected Future Cash Flows P180,000 P200,000 150,000 50,000 1 90 days 2 Current Not calculated 3 60 days 37,000 Other information: Loan 1- The borrower has filed for bankruptcy. Loan 2 - None Loan 3 - The borrower recently lost his job due to an economic recession and was granted a concession to skip payments. Additional information taking into account historical information, current conditions and forward looking information, including actual loss experience and recoveries from the sale of collateral, is as follows: Probability of default in the next 12 months 2% Lifetime probability of default Credit-impaired loans 100% Not credit-impaired loans 5% Loss given default on all loans 25% 17. The required loss allowance at Dec. 31, 2020 is

The following information pertains to Lender A's loan portfolio at December 31, 2020: • Lender A considers all loans over 90 days past due to be credit-impaired based on historical experience with recovering the associated debt. • The aging of Lender A's loans on December 31, 2020 follows: Current More than 30 days past due More than 60 days past due More than 90 days past due P1,400,000 75,000 100,000 125,000 P1,700,000 Total • Lender A monitors certain loans more closely on an individual basis given their significance and unique characteristics. These loans are not included in the P1,700,000 loan portfolio. The following information is available without undue cost or effort on an individual loan basis: Loan Amount Past Due Status PV of Expected Future Cash Flows P180,000 P200,000 150,000 50,000 1 90 days 2 Current Not calculated 3 60 days 37,000 Other information: Loan 1- The borrower has filed for bankruptcy. Loan 2 - None Loan 3 - The borrower recently lost his job due to an economic recession and was granted a concession to skip payments. Additional information taking into account historical information, current conditions and forward looking information, including actual loss experience and recoveries from the sale of collateral, is as follows: Probability of default in the next 12 months 2% Lifetime probability of default Credit-impaired loans 100% Not credit-impaired loans 5% Loss given default on all loans 25% 17. The required loss allowance at Dec. 31, 2020 is

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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The following information pertains to Lender A's loan portfolio at December 31, 2020: • Lender A considers all loans over 90 days past due to be credit-impaired based on historical experience with recovering the associated debt. • The aging of Lender A's lbans on December 31, 2020 follows: Current More than 30 days past due More than 60 days past due More than 90 days past due Total P1,400,000 75,000 100,000 125,000 P1,700,000 • Lender A monitors certain loans more closely on an individual basis given their significance and unique characteristics. These loans are not included in the P1,700,000 loan portfolio. The following information is available without undue cost or effort on an individual loan basis: Amount P200,000 Status PV of Expected Future Cash Flows P180,000 Loan Past Due 90 days Current 1 2 150,000 50,000 Not calculated 3 60 days 37,000 Other information: Loan 1- The borrower has filed for bankruptcy. Loan 2 - None Loan 3 - The borrower recently lost his job due to an economic recession and was granted a concession to skip payments. Additional information taking into account historical information, current conditions and forward looking information, including actual loss experience and recoveries from the sale of collateral, is as follows: Probability of default in the next 12 months 2% Lifetime probability of default Credit-impaired loans 100% Not credit-impaired loans 5% Loss given default on all loans 25% 17. The required loss allowance at Dec. 31, 2020 is
Transcribed Image Text:The following information pertains to Lender A's loan portfolio at December 31, 2020: • Lender A considers all loans over 90 days past due to be credit-impaired based on historical experience with recovering the associated debt. • The aging of Lender A's lbans on December 31, 2020 follows: Current More than 30 days past due More than 60 days past due More than 90 days past due Total P1,400,000 75,000 100,000 125,000 P1,700,000 • Lender A monitors certain loans more closely on an individual basis given their significance and unique characteristics. These loans are not included in the P1,700,000 loan portfolio. The following information is available without undue cost or effort on an individual loan basis: Amount P200,000 Status PV of Expected Future Cash Flows P180,000 Loan Past Due 90 days Current 1 2 150,000 50,000 Not calculated 3 60 days 37,000 Other information: Loan 1- The borrower has filed for bankruptcy. Loan 2 - None Loan 3 - The borrower recently lost his job due to an economic recession and was granted a concession to skip payments. Additional information taking into account historical information, current conditions and forward looking information, including actual loss experience and recoveries from the sale of collateral, is as follows: Probability of default in the next 12 months 2% Lifetime probability of default Credit-impaired loans 100% Not credit-impaired loans 5% Loss given default on all loans 25% 17. The required loss allowance at Dec. 31, 2020 is
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