This Financial Insights report focuses on the deployment of a pricing model that uses an income statement approach within the context of a discounted cash flow analysis.
"As lending capital becomes constrained, loans at the individual and portfolio level need to represent economic value. By using an income statement approach combined with a financial valuation methodology, loan assets are viewed in a new light, as economic assets. Measuring the economic value of loan assets brings together marketing, risk, and finance objectives," says Dana Wiklund, research director of Global Risk Management, IDC Financial Insights.