Repossession Purchase Loss—New

• ACCOUNT EXPLANATION
• TRANSACTIONS
• COMMENTS

Provision for estimated repossession losses based upon the excess of purchase cost over estimated wholesale value, less estimated reconditioning, of repossessed vehicles originally sold new.

*Refer to Chart of Accounts for current applicable Sales/Cost of Sales account numbers

• Monthly provision should be made as necessary based upon past experience supplemented with judgment as to the probable amount of future losses.
• Finance income charged back to the dealership due to repossessions should be charged to the appropriate finance income account.
• When Account 2600, Estimated Liability for Repossession Purchase Loss, is not used, actual repossession losses should be charged directly to Account 6070. For additional information, refer to Account 2600.
• Since special treatment of this account may be required for income tax purposes, dealers should consult their tax counsel.