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From June 1 through September 15, 1985, GMAC had an
agreement with American Isuzu Motors, Inc. (Isuzu), to purchase
RISC's bearing an 8.6-percent interest rate from Isuzu dealers
who sold Isuzu trucks to retail customers. Under this program,
Isuzu paid GMAC the difference between the face amount of the
RISC and the fair market value of the RISC (discounted at the
rate of 13.5 percent) at the time of purchase.
From October 9 through November 20, 1985, GMAC had an
agreement with American Motors Corporation (AMC) to purchase
RISC's bearing an 8.8-percent interest rate from AMC dealers who
sold (1) Renault Alliance and Encore vehicles, and (2) Jeep
Cherokee, Wagoneer, and Comanche vehicles to retail customers.
Under this program, AMC reimbursed GMAC the difference between
the face amount of the RISC and the fair market value of the RISC
(discounted at the rate of 13.25%) at the time of purchase.
IV. GM's and GMAC's Accounting
A. GMAC's Accounting for Rate-Supported RISC's12
GMAC accounted for the acquisition of a rate-supported RISC
(whether for a GM or non-GM vehicle) as follows: When GMAC
purchased the rate-supported RISC, it recorded as assets on its
books (1) a "retail customer receivable", and (2) a "rate support
receivable". The retail customer receivable was equal to the
12 For an example, see infra pp. 33-34.
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