Statements of Position



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This proposed revised audit and accounting guide reflects changes in accounting and auditing literature that have occurred since the guide was last published in 1973. This proposed revision would apply to all finance companies and to lending activities of other enterprises. The proposed guide recommends the following changes in accounting practices, which the committee believes are desirable and warranted: 1. Recognition of interest income on finance receivables using the interest (actuarial) method (page 10); 2. Use of the accrual with suspension basis for recording interest income (pages 11 and 12); 3. Inclusion of interest as a holding cost in determining net realizable value of repossessed collateral expected to be held for a significant period (page 15). In addition, the proposed guide includes an expanded discussion of the insurance activities of finance companies (pages 49 through 56).

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Commercial finance companies -- United States -- Auditing; Commercial finance companies -- United States -- Accounting


Accounting | Taxation


Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed audit and accounting guide : finance companies (including lending activities of other enterprises);Finance companies (including lending activities of other enterprises); Exposure draft (American Institute of Certified Public Accountants), 1986, July 9



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