Bloomberg Tax
Jan. 23, 2020, 9:45 AM

‘Bank’ Accounting Change Looms for Automakers, Other Non-Banks

Nicola M. White
Nicola M. White

Ford Motor Co., General Motors Co., Carmax Inc., and a regional electronics retail chain have something in common: They’re affected by new accounting rules designed to make banks own up to losses on loans before they go bad.

None of them are banks. But because a large part of their business involves extending credit to customers to buy their cars, trucks, and flat-screen TVs, they have to recalculate and increase loan-loss reserves like banks do. GM has disclosed that it expects to have to set aside another $500 million to $700 million; Ford, an additional $200 million, and ...

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