Accounting for Banks

1. Include in your presentation an introduction to financial statements of banks. What are their primary assets, liabilities, revenues, and expenses?

The balance sheet, form FR 34, shows in detail the assets, liabilities, and capital accounts of the Federal Reserve Banks and certain additional information such as U.S. Government deposits with special depositaries, collateral and custodies held, classifications of “Other deposits—Miscellaneous,” and certain memorandum accounts.

The balance sheet is the basis for the weekly statement of condition which the Board of Governors is required by law to publish periodically. It also furnishes the Board of Governors with basic, original source material for statistical data, much of which is published, relating to the condition of Federal Reserve Banks

2. For some examples of bank accounting see: http://www.accountingcoach.com/debits-and-credits/explanation/4 http://leeds-faculty.colorado.edu/madigan/4000/Worksheets/Loan%20Loss%20Accounting%20Basics.pdf https://www.richmondfed.org/publications/research/economic_brief/2012/pdf/eb_12-03.pdf
3. Get the financial statements for Huntington Banchares Inc for the year ended December 31, 2012 to use as an example.
4. What is the largest asset and liability?
5. Discuss the current accounting for loans. What is the allowance for loan losses and what disclosures are given related to the allowance?
6. How does Huntington account for its securities?
7. What is the business model for Huntington? Include a discussion of its primary revenues and expenses.
8. The FASB proposed new accounting for credit losses of banks. Please describe the change the FASB is proposing. See http://www.fasb.org/cs/ContentServer?c=Document_C&pagename=FASB%2FDocument_C%2FDocumentPage&cid=1176160587925.
9. Create a reading assignment for the class along with three or four questions. One idea would be to have them read Huntington’s balance sheet and income statement (and a few select footnotes). You could then ask them some questions about the financial statements to ensure that they looked at them. Prior to 4:30 p.m. on Thursday Oct 9, provide me a document that I can post on D2L with the questions and a link to the readings. Also provide me a document with the answers to the questions.

From the course policy document:

The group responsible for a particular topic should be prepared to make a 25-30 minute presentation to the class (not including questions from your classmates) on the assigned day. Each group member should have approximately an equal opportunity to participate in the presentation. Students should not rely on notes held in their hands. The text on the slides should be minimal to help students avoid reading the slides. Each member should seek to share with the class what they learned about the topic in an engaging manner (e.g., eye contact, voice rate and inflection, enthusiasm, audience adaptation). Teams could include in their class session things such as in-class exercises, relevant portions of financial reports, or audience participation activities.

Each group is required to work with the E & Y Communications Center on your presentation. To set up an appointment to practice your presentation at the Center see http://msu.mywconline.com/. When you visit the Center to practice your presentation you will receive a verification form that you should turn in to me the day of your presentation.

The presentation should be a means for your team to share with your fellow students useful knowledge that you learned regarding