Commercial Lending Review articles from September 2007

Commercial Lending Review archives from September 2007

A new approach to pension accounting: recognizing a pension plan's funded status on the balance sheet: the pension protection act could affect cash flows.
September 1, 2007... In a dramatic break from previous guidance, in September 2006 the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards (SFAS) No. 158, Employers' Accounting for Defined Benefit Pension and Other...

Market liquidity can mask fraud threats: what market factors are making lenders more susceptible to fraud?
September 1, 2007... In the land of opportunity, the availability of new cash may possibly cause more problems for lenders than anticipated. The potential for corporate borrowers to venture into fraudulent practices seems to have increased in the recent era of...

Continuous monitoring: improving credit risk management effectiveness: continuous monitoring lets institutions focus on credits that present the greatest risk.
September 1, 2007... Today's ultra-heightened focus on managing credit, risk is fueling one of senior management's main concerns: the need for sound methods to monitor and manage credit risk. While most lending policies require the relationship manager to...

The relationship between Wal-Mart's inventory cutbacks in 2006 and suppliers' sales trends: a recent inventory cutback affords an opportunity to learn how reduced purchases by Wal-Mart affected its suppliers.(Company overview)
September 1, 2007... Increased concentration within the retail sector has led to greater vulnerability for the manufacturers that supply these retailers. It has become common for a supplier to have one or more major customers that each accounts for 10 percent (and...

SBA survey examines credit scoring for small business: for banks that adopt small business credit scoring, the score alone typically is not treated as a sufficient measure of the creditworthiness of the business borrower.(SMALL BUSINESS)
September 1, 2007... What was once a solely relationship-based loan market is in a state of transition, as banks embrace small business credit scoring (SBCS). To measure the effect of this trend on loans to small businesses, we surveyed banks in the United States...

AMPAD decision affects trustee's ability to avoid preferences: ruling affects statute of limitations for avoiding preferences.(BANKRUPTCY LAW)(American Pad & Paper Co.)
September 1, 2007... A distressed company can find itself in a Chapter 7 bankruptcy liquidation in one of three ways. First, the company can file a Chapter 7 bankruptcy petition, which is very rare. Second, the company may file for Chapter 11 but the reorganization...

Guidance on changes and misstatements proposed for private companies and nonprofits: an FASB staff proposal would codify methods of quantifying misstatements.(ACCOUNTING)
September 1, 2007... The staff at the Financial Accounting Standards Board (FASB) recently proposed a FASB Staff Position (FSP) to describe how all businesses and nonprofit organizations would consider the effects of prior-year uncorrected misstatements when...

What level of due diligence is enough? A framework to evaluate costs and risks.(ENVIRONMENTAL LIABILITY)
September 1, 2007... Environmental due diligence has been an integral part of a lender's decision-making process when considering real estate transactions since the promulgation of many federal environmental regulations in the 1970s. Knowledge of environmental...