Accounting Principles for Lenders

This course will introduce the flow of accounting - from identifying economic occurrences and how they are reported in financial statements. Learn how the Balance Sheet, Income Statement, Reconciliation of Net Worth, and Cash Flow Statement are developed and connected to each other.

The presenter is a former professional banker; therefore the approach to the credit analysis process will be from a banker’s perspective. Case studies will be used to reinforce concepts.

Covered Topics:

  • Underlying Assumptions Used by Accountants
  • Rules of Debits and Credits
  • Construction of the Balance Sheet, Income Statement, Reconciliation of Net Worth and the Statement of Cash Flow
  • Difference between Accrual and Cash Basis Accounting
  • Analysis of Accounts often used as Collateral such as:
    • Accounts Receivable (Aging Schedules, Allowance Calculations, etc)
    • Inventory (Effect of LIFO, FIFO and Average Cost Costing Methods)
    • Fixed Assets (Effect of varying Depreciation Methods)
  • Analysis of the Notes to the Financial Statements
  • Types of Financial Statements and meaning of CPA’ Opinions
Leave with a firm understanding of:
  • How financial statements are constructed
  • How the financial statements are connected
  • The accounting used for major collateral accounts
  • How to apply the concepts to credit analysis

Who Should Attend?

Commercial Lenders, Consumer Lenders, Branch Managers, Credit Analysts, Loan Review Officers, Credit Officers and Directors requiring a better understanding of financial statements