The Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-01 regarding a significant change in the value of financial instruments with Accounting Standards Codification (ASC) 825-10–Financial Instruments. Among other things, this update requires that financial instruments that are not recognized at fair value be disclosed at fair value using an “exit price” application consistent with ASC 820-10–Leases. Our team and process can assist you with compliance utilizing our well-established software system that is subject to the SOC 1 Type 2 certification process.
Leverage Relevant Data
Assumptions including default and loss rates, prepayment speeds, etc. can be applied based on bank specific inputs and calculations. Your company can also utilize our proprietary index developed through valuing billions of dollars in loans with calculations performed at a loan level in an efficient manner. With enough relevant data, our software can analyze and produce insights into your loans and deposits that stay aligned with ASC compliance.
Valuant currently values billions of dollars’ worth of loans and deposits annually for due diligence, Day 1, and Day 2 accounting purposes. Our ValuCast software gives users maximum transparency and flexibility to analyze individual loan cash flow projections for their entire portfolio. Users can efficiently calculate the total fair value adjustments by explicitly applying a credit loss assumption and calculating an additional fair value adjustment mark that contemplates both interest rate and liquidity assumptions under an “exit price” application as outlined in ASC 820.
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