DOUBTFUL ACCOUNTS
The French Banking Commission instruction No. 91-05 enforces new reporting requirements (DREP), which specify that banks must systematically downgrade to doubtful accounts any loans showing any of the following three features, including guaranteed loans:
Probable or certain risk of partial or total non recovery.
In the event of an installment being more than three months
overdue (for all types of credit or movable property leasing)
or more than six months overdue (for real estate credits or
leasing operations)
Of a contentious nature (in France: warning proceedings, object
of a judgement declaring legal reorganization, liquidation
proceedings, personal bankruptcy, liquidation of property,
legal settlement, etc.).
