General Motors Corporation and Subsidiaries - Page 36




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               retail customer paid GMAC over the term of the RISC)                    
               minus the fair market value of the RISC at the time of                  
               its purchase.                                                           
                    b.  RISC Bearing a Below-Market Interest Rate                      
               Suppose a retail customer's RISC had a face amount of                   
          $10,000, below-market stated interest of $2,000 to be paid by the            
          customer over the term of the RISC, and a fair market value of               
          $9,500.  GMAC purchased the RISC for $9,500, and it recorded the             
          following items on its books:                                                
               Retail customer receivable          1$12,000                            
               Cash                                 (9,500)                            
               Unearned income                      2(2,500)                           
               1  This figure included the $10,000 face value of the                   
               RISC and $2,000 below-market stated interest.                           
               2  This figure equaled the face amount of the RISC plus                 
               the stated interest (i.e., the total amount the retail                  
               customer was to pay GMAC over the term of the RISC)                     
               minus the fair market value of the RISC at the time of                  
               its purchase.                                                           
               3.  Fleet Loans and Fleet Rate Support                                  
               Suppose a fleet customer acquired fleet vehicles for                    
          $1,100,000 making a $100,000 downpayment in cash and financing               
          the $1 million balance with a note from GMAC with a term of 48               
          months at an interest rate of 8 percent when GMAC's lending rate             
          was 10 percent.  The fair market value of the note at the time of            
          its purchase, therefore, was $957,600.24  GMAC lent $1 million to            

               24  The parties stipulated this example and calculated the              
          fair market value of the note to be $957,600 and the fleet rate              
                                                              (continued...)           





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