ECPG » Topics » Reclassification

This excerpt taken from the ECPG 10-Q filed Apr 29, 2009.

Reclassification

The prior year’s consolidated statement of cash flows has been changed to the indirect method, to conform to the current year’s presentation. Additionally, certain reclassifications have been made to the consolidated financial statements to conform to the current year’s presentation.

These excerpts taken from the ECPG 10-K filed Feb 11, 2009.

Reclassification

During the year ended December 31, 2008, the Company changed the presentation of its cash flows from the direct method to the indirect method, in order to conform to comparable industry presentations. As a result, the prior years’ consolidated statement of cash flows has been changed to the indirect method, to conform to the current year’s presentation.

The Company reclassified $3.8 million of restricted cash as of December 31, 2007, from restricted cash to cash and cash equivalents in order to conform to the current year’s presentation.

Reclassification

During the year ended December 31, 2008, the Company changed the presentation of its cash flows from the direct method to the indirect method, in order to conform to comparable industry presentations. As a result, the prior years’ consolidated statement of cash flows has been changed to the indirect method, to conform to the current year’s presentation.

The Company reclassified $3.8 million of restricted cash as of December 31, 2007, from restricted cash to cash and cash equivalents in order to conform to the current year’s presentation.

Reclassification

FACE="Times New Roman" SIZE="2">During the year ended December 31, 2008, the Company changed the presentation of its cash flows from the direct method to the indirect method, in order to conform to comparable industry presentations. As a
result, the prior years’ consolidated statement of cash flows has been changed to the indirect method, to conform to the current year’s presentation.

FACE="Times New Roman" SIZE="2">The Company reclassified $3.8 million of restricted cash as of December 31, 2007, from restricted cash to cash and cash equivalents in order to conform to the current year’s presentation.

STYLE="margin-top:18px;margin-bottom:0px">Cash and Cash Equivalents

Cash and cash
equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase. The Company invests its excess cash in bank deposits and money market instruments, which are afforded the highest ratings by nationally
recognized rating firms. The carrying amounts reported in the consolidated statements of financial condition for cash and cash equivalents approximates its fair value.

FACE="Times New Roman" SIZE="2">Investment in Receivables Portfolios

Commencing January 1, 2005, the Company began
accounting for its investment in receivable portfolios in accordance with the provisions of AICPA Statement of Position 03-3, “Accounting for Certain Debt Securities in a Transfer” (“SOP 03-3”). SOP 03-3 addresses
accounting for differences between initial estimated cash flows expected to be collected from purchased receivables, or “pools,” and subsequent changes to those estimated cash flows. SOP 03-3 limits the revenue that may be accreted (also
known as accretable yield) to the excess of the Company’s estimate of undiscounted cash flows expected to be collected over the Company’s investment, or cost basis, in the pool.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">As permitted by SOP 03-3, static pools are established on a quarterly basis with accounts purchased during the quarter that have common risk
characteristics. Discrete receivable portfolio purchases during a quarter are aggregated into pools based on these common risk characteristics. Once a static pool is established, the portfolios are permanently assigned to the pool. The discount
(i.e., the difference between the cost of each static pool and the related aggregate contractual receivable balance) is not recorded because the Company expects to collect only a relatively small percentage of each static pool’s
contractual receivable balance. As a result, receivable portfolios are recorded at cost at the time of acquisition. All portfolios with common risk characteristics purchased prior to the adoption of SOP 03-3 were aggregated by quarter of purchase.

In compliance with SOP 03-3, the Company accounts for its investments in consumer receivable portfolios, using either the interest method
or the cost recovery method. The interest method applies an effective interest rate, or internal rate of return (“IRR”) to the cost basis of the pool, which is to remain level, or unchanged throughout the life of the pool unless there is
an increase in subsequent expected cash flows. Subsequent increases in cash flows expected to be collected generally are recognized prospectively through an upward adjustment of the pool’s IRR over its remaining life. Subsequent decreases in
expected cash flows do not change the IRR, but are recognized as an impairment of the cost basis of the pool, and are reflected in the consolidated statements of operations as a reduction in revenue, with a corresponding valuation allowance
offsetting the investment in receivable portfolios in the consolidated statements of financial condition.

The Company accounts for each
static pool as a unit for the economic life of the pool (similar to one loan) for recognition of revenue from receivable portfolios, for collections applied to the cost basis of receivable portfolios and for provision for loss or impairment. Revenue
from receivable portfolios is accrued based on each pool’s IRR applied to each pool’s adjusted cost basis. The cost basis of each pool is increased by revenue earned and decreased by gross collections and impairments.

STYLE="margin-top:0px;margin-bottom:0px"> 


F-7







Table of Contents


If the amount and timing of future cash collections on a pool of receivables are not reasonably
estimable, the Company accounts for such portfolios on the cost recovery method (“Cost Recovery Portfolios”). The accounts in these portfolios have different risk characteristics than those included in other portfolios acquired during the
same quarter, or the necessary information was not available to estimate future cash flows and, accordingly, they were not aggregated with other portfolios. See Note 3 to the consolidated financial statements for further discussion of investment in
receivable portfolios.

Reclassification

FACE="Times New Roman" SIZE="2">During the year ended December 31, 2008, the Company changed the presentation of its cash flows from the direct method to the indirect method, in order to conform to comparable industry presentations. As a
result, the prior years’ consolidated statement of cash flows has been changed to the indirect method, to conform to the current year’s presentation.

FACE="Times New Roman" SIZE="2">The Company reclassified $3.8 million of restricted cash as of December 31, 2007, from restricted cash to cash and cash equivalents in order to conform to the current year’s presentation.

STYLE="margin-top:18px;margin-bottom:0px">Cash and Cash Equivalents

Cash and cash
equivalents consist of highly liquid investments with maturities of three months or less at the date of purchase. The Company invests its excess cash in bank deposits and money market instruments, which are afforded the highest ratings by nationally
recognized rating firms. The carrying amounts reported in the consolidated statements of financial condition for cash and cash equivalents approximates its fair value.

FACE="Times New Roman" SIZE="2">Investment in Receivables Portfolios

Commencing January 1, 2005, the Company began
accounting for its investment in receivable portfolios in accordance with the provisions of AICPA Statement of Position 03-3, “Accounting for Certain Debt Securities in a Transfer” (“SOP 03-3”). SOP 03-3 addresses
accounting for differences between initial estimated cash flows expected to be collected from purchased receivables, or “pools,” and subsequent changes to those estimated cash flows. SOP 03-3 limits the revenue that may be accreted (also
known as accretable yield) to the excess of the Company’s estimate of undiscounted cash flows expected to be collected over the Company’s investment, or cost basis, in the pool.

STYLE="margin-top:12px;margin-bottom:0px; text-indent:4%">As permitted by SOP 03-3, static pools are established on a quarterly basis with accounts purchased during the quarter that have common risk
characteristics. Discrete receivable portfolio purchases during a quarter are aggregated into pools based on these common risk characteristics. Once a static pool is established, the portfolios are permanently assigned to the pool. The discount
(i.e., the difference between the cost of each static pool and the related aggregate contractual receivable balance) is not recorded because the Company expects to collect only a relatively small percentage of each static pool’s
contractual receivable balance. As a result, receivable portfolios are recorded at cost at the time of acquisition. All portfolios with common risk characteristics purchased prior to the adoption of SOP 03-3 were aggregated by quarter of purchase.

In compliance with SOP 03-3, the Company accounts for its investments in consumer receivable portfolios, using either the interest method
or the cost recovery method. The interest method applies an effective interest rate, or internal rate of return (“IRR”) to the cost basis of the pool, which is to remain level, or unchanged throughout the life of the pool unless there is
an increase in subsequent expected cash flows. Subsequent increases in cash flows expected to be collected generally are recognized prospectively through an upward adjustment of the pool’s IRR over its remaining life. Subsequent decreases in
expected cash flows do not change the IRR, but are recognized as an impairment of the cost basis of the pool, and are reflected in the consolidated statements of operations as a reduction in revenue, with a corresponding valuation allowance
offsetting the investment in receivable portfolios in the consolidated statements of financial condition.

The Company accounts for each
static pool as a unit for the economic life of the pool (similar to one loan) for recognition of revenue from receivable portfolios, for collections applied to the cost basis of receivable portfolios and for provision for loss or impairment. Revenue
from receivable portfolios is accrued based on each pool’s IRR applied to each pool’s adjusted cost basis. The cost basis of each pool is increased by revenue earned and decreased by gross collections and impairments.

STYLE="margin-top:0px;margin-bottom:0px"> 


F-7







Table of Contents


If the amount and timing of future cash collections on a pool of receivables are not reasonably
estimable, the Company accounts for such portfolios on the cost recovery method (“Cost Recovery Portfolios”). The accounts in these portfolios have different risk characteristics than those included in other portfolios acquired during the
same quarter, or the necessary information was not available to estimate future cash flows and, accordingly, they were not aggregated with other portfolios. See Note 3 to the consolidated financial statements for further discussion of investment in
receivable portfolios.

This excerpt taken from the ECPG 10-Q filed Oct 28, 2008.

Reclassification

During the quarter ended September 30, 2008, the Company changed the presentation of its cash flows from the direct method to the indirect method, in order to conform to comparable industry presentations. As a result, the prior year consolidated statement of cash flows has been changed to the indirect method, to conform to the current year’s presentation.

Certain reclassifications have been made to the 2007 condensed consolidated statement of operations to separately show contingent interest expense and to the condensed consolidated statement of cash flows to separately show provisions for impairment and to separately show the change in other assets and the change in deferred court costs.

This excerpt taken from the ECPG 10-Q filed Aug 4, 2008.

Reclassification

Certain reclassifications have been made to the 2007 condensed consolidated statements of operations to separately show contingent interest expense and to the condensed consolidated statements of cash flows to separately show provisions for impairment and to separately show the change in other assets and the change in deferred court costs.

This excerpt taken from the ECPG 10-Q filed May 1, 2008.

Reclassification

Certain reclassifications have been made to the 2007 condensed consolidated statements of operations to separately show contingent interest expense and to the condensed consolidated statements of cash flows to separately show provisions for impairment.

 

8


These excerpts taken from the ECPG 10-K filed Feb 19, 2008.

Reclassification

Certain reclassifications have been made to the 2006 and 2005 consolidated financial statements to conform to the current year’s presentation.

Reclassification

FACE="Times New Roman" SIZE="2">Certain reclassifications have been made to the 2006 and 2005 consolidated financial statements to conform to the current year’s presentation.

FACE="Times New Roman" SIZE="2">Cash and Cash Equivalents

Cash and Cash equivalents consist of highly liquid investments with
maturities of three months or less at the date of purchase. The Company invests its excess cash in bank deposits and money market instruments, which are afforded the highest ratings by nationally recognized rating firms. The carrying amounts
reported in the consolidated statements of financial condition for cash and cash equivalents approximates its fair value.

Restricted Cash

Restricted cash primarily represents temporarily unidentified Company collections, collections held on behalf of lenders and collateral
requirements for the Company’s self insurance policies.

This excerpt taken from the ECPG 10-Q filed Nov 2, 2006.

Reclassification

Certain amounts included in the accompanying condensed consolidated financial statements for prior periods have been reclassified to conform to the current period presentation.

Upon completion of a detailed analysis performed on its net tax assets during the quarter ended March 31, 2006, the Company determined that additional tax portfolio amortization deductions should be reflected as an increase in its prepaid income tax balance with a corresponding decrease in the net deferred tax assets. The amount reclassified on the Company’s consolidated statement of condition as of December 31, 2005 was $9.3 million. This reclassification relates to a temporary difference between GAAP and tax accounting, and accordingly had no impact on the consolidated statements of operations.

This excerpt taken from the ECPG 10-Q filed Aug 3, 2006.

Reclassification

Certain amounts included in the accompanying prior periods’ condensed consolidated financial statements have been reclassified to conform to the current period presentation.

Upon completion of a detailed analysis performed on its net tax assets during the quarter ended March 31, 2006, the Company determined that additional tax portfolio amortization deductions should be reflected as an increase in its prepaid income tax balance with a corresponding decrease in the net deferred tax assets. The amount reclassified on the Company’s consolidated statement of condition as of December 31, 2005 was $9.3 million. This reclassification relates to a temporary difference between GAAP and tax accounting, and accordingly has no impact to the consolidated statements of operations.

This excerpt taken from the ECPG 10-Q filed May 9, 2006.

Reclassification

Certain amounts included in the accompanying prior periods’ condensed consolidated financial statements have been reclassified to conform to the current period presentation.

Upon completion of a detailed analysis performed this quarter on its net tax assets, the Company determined that additional tax portfolio amortization deductions should be reflected as an increase in its prepaid income tax balance with a corresponding decrease in the net deferred tax assets. The amount reclassified on the Company’s consolidated statement of condition as of December 31, 2005 was $9.3 million. This reclassification relates to a temporary difference between GAAP and tax accounting, and accordingly has no impact to the consolidated statements of operations.

This excerpt taken from the ECPG 10-Q filed Nov 3, 2005.

Reclassification

 

Certain amounts included in the accompanying prior periods’ condensed consolidated financial statements have been reclassified to conform to the current period presentation. The Company reclassified $40.0 million of the auction rate securities from cash to investments in marketable securities as of December 31, 2004.

 

8


Table of Contents
Wikinvest © 2006, 2007, 2008, 2009, 2010, 2011, 2012. Use of this site is subject to express Terms of Service, Privacy Policy, and Disclaimer. By continuing past this page, you agree to abide by these terms. Any information provided by Wikinvest, including but not limited to company data, competitors, business analysis, market share, sales revenues and other operating metrics, earnings call analysis, conference call transcripts, industry information, or price targets should not be construed as research, trading tips or recommendations, or investment advice and is provided with no warrants as to its accuracy. Stock market data, including US and International equity symbols, stock quotes, share prices, earnings ratios, and other fundamental data is provided by data partners. Stock market quotes delayed at least 15 minutes for NASDAQ, 20 mins for NYSE and AMEX. Market data by Xignite. See data providers for more details. Company names, products, services and branding cited herein may be trademarks or registered trademarks of their respective owners. The use of trademarks or service marks of another is not a representation that the other is affiliated with, sponsors, is sponsored by, endorses, or is endorsed by Wikinvest.
Powered by MediaWiki