Subprime Lender Urges Investors to Ignore Stated Loan Losses (1)

A new accounting rule clobbered earnings at a major subprime auto lender this quarter, but its management has delivered a message to investors: Ignore it.

Instead of focusing on the numbers required by a new U.S. accounting rule, Credit Acceptance Corp. told investors to zero in on unofficial accounting that the company says better reflects the financial health of its business.

The result: an $83.8 million loss turned into a $175.7 million profit.

This could put the Southfield, Mich. company in the crosshairs of the Securities and Exchange Commission. While the market regulator allows companies to use unofficial accounting ...