NOTE 5: ALLOWANCE FOR LOAN LOSSES

question 32

Essay

NOTE 5: ALLOWANCE FOR LOAN LOSSES

The allowance for loan loss is maintained at a level to absorb probable losses inherent in the loan portfolio. This allowance is increased by provisions charged to operating expense and by recoveries on loans previously charged off, and reduced by charge-offs on loans.

The following is a summary of the changes in the allowances for loan losses for three years:

Winchester also reported (in thousands) in its comparative balance sheet that it held Loans receivable, net, of $6,869,11 and $6,819,209 at December 31, 2018, and December 31, 2017, respectively.
-Is there any evidence in Winchester's disclosures above that are consistent with earnings management?

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Definitions:

Packaged Drape

A sterile covering used in medical settings to maintain a sterile field during surgeries or procedures.

Irrigation Solution

A fluid used to clean, flush, or moisten tissues or wounds in medical settings.

Surgical Asepsis

A set of sterile practices and procedures used to eliminate all microbial life, including spores, from an area or object, crucial in surgical and certain medical procedures to prevent infection.

Sterile Package

Packaging that has been treated to ensure it's free from all living microorganisms to maintain cleanliness and prevent infection.