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amortized pursuant to SFAS 91 for financial accounting purposes,
and that such costs and fees were currently reported as income or
deducted as expenses for Federal income tax purposes.
Respondent calculated the adjustments in issue in the UFB
cases based solely on the balances in some of the UFB fee and
cost ledger accounts. The fees and costs reflected in those
accounts were included in income and deducted by UFB on its Forms
1120 for the years received or incurred. Respondent reduced the
adjustments so determined by an allowance for amortization, which
was calculated using a half-year convention and was based on an
estimated loan life of 3 years. The amortization deduction
permitted by respondent differs from the amortization taken into
account by UFB as a component of interest income in accordance
with SFAS 91.
The costs at issue in the UFB cases include only costs
incurred by UFSB with respect to the origination of consumer
loans and specifically include only standard costs paid by UFSB
to record security interests and standard costs paid to third
parties for property reports, credit reports, and appraisals.
Respondent made no adjustments with respect to other UFSB loan
categories, such as commercial loans and residential and
commercial mortgage loans. The costs at issue in the UFB cases
do not include any costs incurred in connection with UFSB's
unsuccessful loan efforts (i.e., where a loan was not originated)
or any costs incurred following a loan's origination by UFSB.
The following table reflects the loan origination costs
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