GROUP VI – RISK MANAGEMENT

GROUP VI – RISK MANAGEMENT - Reduce risks...

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GROUP VI – RISK MANAGEMENT SUMMARY DESCRIPTION ADVANTAGE’s new credit card program (along with its Extended Warranties) carries risks
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STRATEGIES OF RM’s PROPOSAL EXTENDED WARRANTIES: Outsource to Third Party Keep half of the “Warranty Revenues” Risk of Loss handled by insurer CREDIT CARD PROGRAM: Transfer Receivables at 90% of Fair Value Provide a Servicing Fee
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VALUE PROPOSITION ECONOMIC GOAL:
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Unformatted text preview: Reduce risks from customers in the ADVANTAGE program Increase Liquidity in the transfer of receivables POTENTIAL BENEFITS: Immediate Collection of Receivables ACCOUNTING ISSUES Transfer of Receivables a True Sale according to GAAP and IFRS? Should Receivables be Recorded at Market or Book Value? How to Account for the Contingent Liability in the Recourse Obligation...
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GROUP VI – RISK MANAGEMENT - Reduce risks...

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