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Upon shipment by GM of a fleet purchase, GM received payment
for the fleet vehicles. In most cases, this payment was made
through the independent GM dealer's wholesale financing source.
The fleet customer then borrowed the agreed-upon amount of
funds from GMAC or an unrelated lender. This amount was credited
to the independent GM dealer (or, in most cases, the independent
GM dealer's wholesale financing source) as consideration for the
vehicles.
If the lender made a below-market interest rate loan, GM
paid GMAC or the unrelated lender a "fleet rate support payment".
The amount of the fleet rate support payment equaled the
difference between the face amount of the fleet loan and the fair
market value of the fleet loan at GMAC's lending rate.
B. GMAC's Accounting for the Fleet Loans18
GMAC accounted for the fleet loans as follows: When GMAC
made a fleet loan, it recorded as assets on its books (1) a
"fleet purchaser receivable", and (2) a rate support receivable.
The fleet purchaser receivable was equal to the face amount of
the loan (i.e., the amount the fleet customer actually borrowed
from GMAC). The rate support receivable was equal to the fleet
rate support payment to be made by GM to GMAC.
17(...continued)
determined its buy rate.
18 For an example, see infra pp. 36-37.
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