Provision for Credit Losses
- The amount deducted from income that is equal to the amount a bank adjusts its loan balances to reflect anticipated losses on the loans.
allowance for doubtful accounts, allowance for credit losses, bad debt expense
Related Terms and Acronyms
- Bank — Definition,
- An institution that acts as a financial intermediary by receiving money from depositors and lenders and also lending to borrowers.
- Credit Risk — Definition,
- The risk of loss assumed under a financial contract that a borrower or a counter-party to a loan or other credit-related contract may default or fail to fulfill its obligations.
- Deductions — Definition,
- Expenses the government allows you to subtract from your taxable income. If you have taxable income of $31,000 and deductions of $4,000, then you would figure how much tax you owe on the difference -- $27,000.
- Lender — Definition,
- The bank or mortgage company offering the loan.
- Loan — Definition,
- Letting another party use something of value temporarily.
- Loss — Definition,
- When expenses are larger than revenues.
- Principal — Definition,
- The original balance of money lent on an outstanding loan and fees, excluding interest. Also the remaining balance of a loan, excluding interest.
- Remaining Balance — Definition,
- Unpaid principal on a loan.