Audit and Accounting Guide Depository and Lending Institutions, 2nd Edition

Chapter 17 Equity and Disclosures Regarding Capital Matters

Introduction

17.01 Chapters 1, “Industry Overview—Banks and Savings Institutions,” and 2, “Industry Overview—Credit Unions,” of this guide discuss the regulatory capital requirements for banks and savings institutions and credit unions, respectively. Chapter 4, “Industry Overview—Mortgage Companies,” of this guide discusses similar capital requirements for mortgage companies. This chapter discusses the related financial statement disclosures and auditing guidance. Chapter 3, “Regulatory Considerations,” of the AICPA Accounting Guide Brokers and Dealers in Securities, discusses similar capital requirements for broker-dealers. Finance companies unaffiliated with banking organizations are not subject to regulatory capital requirements. Finance companies affiliated with banking organizations are subject to consolidated regulatory capital requirements and prudential supervision by the Board of Governors of the Federal Reserve System (Federal Reserve).

Banks and Savings Institutions

Introduction

17.02 Banks are organized with capital stock and shareholders. Savings institutions operate under a capital stock structure, like banks, or a cooperative form of ownership, similar to credit unions. Savings institutions operating under the cooperative form are referred to as “mutual institutions.” Although mutual institutions may be incorporated, they issue no capital stock and have no stockholders. The equity section of a mutual ...