AICPA issues accounting, reporting rules for entities that Lend or Finance. (Accounting & auditing news).In Dec. 2001, the AICPA's Accounting Standards Executive Committee issued Statement of Position 01-6, Accounting by Certain Entities (Including Entities With Trade Receivables Receivables An asset designation applicable to all debts, unsettled transactions or other monetary obligations owed to a company by its debtors or customers. Receivables are recorded by a company's accountants and reported on the balance sheet, and they and include all debts owed ) That Lend to or Finance the Activities of Others (No. 014933CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. 02). The SOP is effective for financial statements issued for fiscal years beginning after Dec. 15, 2001; earlier application is encouraged. Trade Receivables. With limited exceptions, this SOP applies to any entity that lends to or finances the activities of others. For example, that arrangement may be a financing arrangement that only involves extending credit to trade customers resulting in trade receivables, a secured mortgage loan, or an unsecured Unsecured A loan or equity interest that is given without any guarantee of payment, performance, satisfaction or opportunity for return from the recipient. No property, interest or security is used as collateral in either a guarantee or a pledge. commercial loan. These arrangements were included in the scope of the AICPA AICPA See American Institute of Certified Public Accountants (AICPA). Audit and Accounting Guide Audits of Finance Companies (FC Guide) and, accordingly, are also included in the scope of this SOP. The FC Guide covered all financing activities of business enterprises designed to encourage customers to purchase products and services. This included financings of different types and duration, from shorter-term trade financings to extended-term arrangements both for an entity's own products and services as well as for the products and services sold by unaffiliated businesses. Insurance Companies. Insurance companies were explicitly excluded from the scope of the FC Guide. Consistent with the objective of providing uniform guidance, lending and financing activities of insurance companies are included in the scope of this SOP. Corporate Credit Unions and Mortgage Companies. Under this SOP, corporate credit unions and mortgage companies are explicitly subject to these new accounting and reporting provisions and disclosure requirements, including disclosures about regulatory capital and net worth requirements. Financial Institutions. This SOP also provides specialized spe·cial·ize v. spe·cial·ized, spe·cial·iz·ing, spe·cial·iz·es v.intr. 1. To pursue a special activity, occupation, or field of study. 2. guidance for other types of transactions specific to certain financial institutions. Divergence divergence In mathematics, a differential operator applied to a three-dimensional vector-valued function. The result is a function that describes a rate of change. The divergence of a vector v is given by in accounting practices among certain elements of the financial services The examples and perspective in this article or section may not represent a worldwide view of the subject. Please [ improve this article] or discuss the issue on the talk page. industry for similar transactions has resulted in the need for a reconciliation of existing guidance. This SOP reconciles and conforms, as appropriate, the accounting and financial reporting provisions established by the AICPA's Audit and Accounting Guides Banks and Savings Institutions, Audits of Credit Unions and the FC Guide. To order a copy of SOP 01-6, contact the CPA2Biz Customer Service Center (see page 4; price: Dual AICPA/state society member, $12.80; AICPA member, $13.60; state society member, $14.40; non-member, $16). Sydney Sydney, city, Australia Sydney, city (1991 pop. 3,097,956), capital of New South Wales, SE Australia, surrounding Port Jackson inlet on the Pacific Ocean. Sydney is Australia's largest city, chief port, and main cultural and industrial center. Garmong, sgarmong@aicpa.org |
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