What does PLL mean in ACCOUNTING
Provision for Loan Loss (PLL) is an allowance set aside by companies to provide protection against unexpected losses in the loan portfolio. PLL reserves are often held on financial statements as an asset, which helps reduce any losses that may occur due to defaults in loan payments. This provision can help companies prepare for potential tough economic times and remain resilient.
PLL meaning in Accounting in Business
PLL mostly used in an acronym Accounting in Category Business that means Provision for Loan Loss
Shorthand: PLL,
Full Form: Provision for Loan Loss
For more information of "Provision for Loan Loss", see the section below.
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Essential Questions and Answers on Provision for Loan Loss in "BUSINESS»ACCOUNTING"
What is Provision for Loan Loss (PLL)?
Provision for Loan Loss (PLL) is an allowance set aside by companies to provide protection against unexpected losses in the loan portfolio.
How does PLL work?
PLL reserves are often held on financial statements as an asset, which helps reduce any losses that may occur due to defaults in loan payments.
What purpose does PLL serve?
This provision can help companies prepare for potential tough economic times and remain resilient.
Is this measure mandatory?
It depends on the company's policies and some countries may have regulations regarding this matter. Generally speaking, it is recommended to set aside a certain amount of money as a preventive measure against potential losses.
Can this help improve creditworthiness?
Yes, setting up a provision fund like PPL can increase a company's creditworthiness since it shows investors that the business is financially prepared for unpredictable events.
Final Words:
In conclusion, Provision for Loan Loss (PLL) is an important allowance that provides extra protection against unexpected losses in the loan portfolio. It helps companies become more resilient during challenging economic periods and also improves their creditworthiness with investors.