Understanding the accounting on non-prime auto lenders is a bear for the lay investor. This accounting is too clever by half.
Unfortunately, the CFO of UACA does not have a handle on the accounting either.
biz.yahoo.com
Union Acceptance restating financials
INDIANAPOLIS, Aug 17 (Reuters) - Union Acceptance Corp., an auto finance company, said it will restate financial statements for the fiscal year ended June 30, 1997, and the first three quarters of fiscal 1998.
The company said the changes will not materially affect shareholders' equity. However, they will result in a net loss for the fourth quarter of $5 million to $6 million and for the full year of $9 million to $10 million, it said.
The primary reason relates to accounting for its excess servicing asset.
Union Acceptance said historically it measured the accounting item ''impairment'' relating to the excess servicing asset on an aggregate basis. But the company's independent auditors recently changed their interpretation of applicable accounting rules to require presenting that item on a pool by pool basis.
''Obviously, we wish these reporting changes were not necessary,'' said chief financial officer Rick Brown in a statement. ''These changes represent a more conservative approach. We emphasize that these changes result from changes in the advice on these issues that we received from our auditors. There are no new facts of which they have not been fully aware.''
The restatement will reduce fiscal 1997 earnings by about $1.5 million to $2.5 million reduce earnings for the nine months ended March 31, 1998, by about $8 million to $9 million, the company said.
Copyright c 1998 Reuters Limited. |
