Arkansas
State Bank Department
Common Reporting Errors
(updated March 3, 2004)
The Federal Reserve provides bank holding
companies with forms for annual, quarterly or semi-annual reports (determined
by asset size and number of subsidiaries).
One copy of each report sent to the Federal Reserve must also be sent to
the Arkansas State Bank Department pursuant to Administrative Order #002.
The following reporting errors are most
commonly noted:
Balance Sheet:
Failure to reconcile the parent company’s ‘investment in the equity of
bank subsidiary’ to the bank’s Call Report ‘equity capital’ for the
corresponding reporting period. A
reconcilement worksheet usually accompanies the FR Y-9 report form. Refer to http://www.federalreserve.gov/boarddocs/reportforms/categoryindex.cfm?WhichCategory=1
Income Statement: Failure to report ‘dividend income’ from
subsidiaries and/or incorrect reporting of ‘equity in undistributed earnings of
the bank subsidiary.' “Undistributed earnings”
is the difference between the bank’s net income and bank’s dividends paid.
Failure to properly accrue for dividends
receivable/payable; interest receivable/payable; and income taxes
receivable/payable. Management is
reminded that dividends are to be booked “payable” and deducted from retained
earnings as soon as the Board declares dividends, regardless of payment date.
Trust preferred securities
(“TruPS”)*.
Refer to instructions for appropriate FR Y-9 report form to determine
correct reporting lines. As of
It is recommended that a “Changes in
Stockholders’ Equity” worksheet be maintained for the purpose of properly
reconciling changes which occur to each of the parent company’s capital
accounts. Changes that affect the bank
subsidiary’s capital accounts (which are not reflected in the bank’s income
statement) are to be reflected on the books of the parent company in an
appropriate capital account. Other changes
in the bank subsidiary’s capital accounts which will not be reflected on an
income statement include accounting adjustments for prior years and net
unrealized gain (loss) on available-for-sale securities.
*Anticipated reporting change does not
represent any change to the risk-based capital treatment for TruPS. Refer to
Federal Reserve Supervisory Letter SR 03-13 of
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