I am testing our charge-off calculations to ALLL based on the fair market value less selling expenses vs the recorded amount of the loan. We have added legal fees and other costs incurred before we obtained possession to the loan balance. Are we correctly adding these expenses to the loan?

If I understand you right, you're taking those costs into consideration when determining your ALLL adequacy? If so, yes you're doing it correctly. I have an incredibly useful article on ALLL calculations that I used to overhaul our ALLL methodology this year, pm me if you'd like a copy.

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