Wiley GAAP 2008

Banking and Thrift Perspective and Issues

In 2004 the AICPA issued a new AAG, Depository and Lending Institutions: Banks and Savings Institutions, Credit Unions, Finance Companies and Mortgage Companies. This replaced former, separate guides for each of these industries and reflects the new, unified set of financial reporting requirements applicable to all such institutions. Among other things, this AAG incorporates requirements set forth by FAS 150, FIN 46(R), FTB 01‐1, and various FSP and EITFs.

While at one time regulator‐imposed financial reporting rules (regulatory accounting principles, commonly called RAP) were mandated for official filings and were also often utilized for general purpose reporting, this is no longer true. Today, financial reporting by banks and thrifts must comply with GAAP, although some specialized industry guidance does exist within that body of standards. In general, certain characteristics unique to financial services entities do demand that certain accounting and financial reporting matters be given more elaboration and interpretation than do these same principles when applied to less specialized entities. These more complex areas are summarized in this section of Chapter 25.

The thrift and (to a lesser degree) banking industries endured difficult times in the 1980s and early 1990s, largely due to very difficult interest rate environments, and a record number of banks and thrifts failed. The formal insolvencies of the thrift insurance fund (FSLIC) ...