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This excerpt taken from the GFIG 10-K filed Mar 1, 2007. Prepaid Bonuses and Forgivable Employee Loans—Prepaid bonuses
and forgivable loans to employees are stated at historical value net of
amortization where the contract between the Company and the employee provides
for the return of proportionate amounts outstanding if employment is severed
prior to the termination of the contract. Amortization is calculated using the
straight-line method over the term of the contract, which is generally over
three years. These forgivable loans have interest rates of up to 4.5%. The
Company expects to fully recover the unamortized portion of prepaid bonuses and
forgivable loans when employees voluntarily terminate their employment, or if
their employment is terminated for cause, prior to the expiration of the
contract. The prepaid bonuses and forgivable loans are included in other assets
in the Consolidated Statements of Financial Condition.
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