BOARD OF GOVERNORS
FEDERAL RESERVE SYSTEM
WASHINGTON, D. C. 20551
DIVISION OF BANKING
SUPERVISION AND REGULATION
SR 93-42 (FIS)
July 16, 1993
TO THE OFFICER IN CHARGE OF SUPERVISION
AT EACH FEDERAL RESERVE BANK
SUBJECT: Interagency Guidance on Accounting for Disposition of Other Real Estate Owned
Interagency guidance regarding the appropriate accounting treatment for dispositions of "other real estate owned" (OREO) is attached. This guidance, which was briefly discussed in the June 10, 1993 Press Release announcing the credit availability initiatives, generally conforms the regulatory reporting requirements for sales of OREO with generally accepted accounting principles (GAAP). This announcement is being issued jointly by the Federal Reserve Board, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.
The guidance indicates that banking organizations should generally account for dispositions of OREO in accordance with Statement of Financial Accounting Standards No. 66, "Accounting for Sales of Real Estate." Beginning with the June 30, 1993 report date, the instructions for OREO in Call Report Schedule RC-M have been revised to generally conform certain minimum down payment requirements to those required under GAAP for those circumstances where banks both sell parcels of OREO property and provide financing for these sales.
This document is being sent to each Reserve Bank separately by the Board's Office of the Secretary with instructions that a copy be forwarded to the chief executive officer of each state member bank and bank holding company in your district.
It is important that a copy of this guidance be made available to each supervisory official and examiner at the Reserve Bank as soon as possible. Also, please ensure that this guidance is fully understood and effectively implemented by all Reserve Bank examiners and supervision staff.
Questions regarding this guidance may be directed to Gerald Edwards at (202) 452-2741, or Charles Holm at (202) 452-3502.
SR letters | 1993