In order to capture each Bank's loan risk exposure bank balance sheets today frequently include both gross loans and leases or the sum of the face amount of all loans and lease contracts currently outstanding and net loans and leases, which equals gross loans less unearned income and allowance for loan
losses.

Question

In order to capture each Bank's loan risk exposure bank balance sheets today frequently include both gross loans and leases or the sum of the face amount of all loans and lease contracts currently outstanding and net loans and leases, which equals gross loans less unearned income and allowance for loan
 losses.

Quizplus · Accepted Answer

Banks include both gross loans and leases (the total face amount of all outstanding loans and lease contracts) and net loans and leases (gross loans minus unearned income and allowance for loan losses) on their balance sheets to accurately capture their loan risk exposure. This distinction helps in understanding the actual risk and value of the loans and leases after accounting for potential losses and unearned income.

In Order to Capture Each Bank's Loan Risk Exposure Bank