Scholarly record
CONTROVERSY IN CONTRACTS WITH INSTALLMENT PLANS: FINANCIAL AND ACCOUNTING APPROACHES TO EARLY TERMINATION ASSESSMENTS
Abstract
It often happens that during the life of an instalment contract, the early termination must be addressed. In particular, due to the default of user, several controversies may emerge in the absence of a specific doctrine, as it happens in the Italian legislation (see, e.g., Hull, 1982; Lease et al., 1990). In this paper, some of the most critical contractual issues arising in the Italian legislative context are considered that turn out to be on the border between law and financial calculus and that may, in certain circumstances, generate controversies especially in the evaluation of the customer's credits (Carretta, 2004; Peccati, 1986). Moreover, since the local Generally Accepted Accounting Principles request the company to account for the expected provisions for specific risks, the calculation and assessment of the components customer's credits are not only necessary for the precise quantification of the credit in judicial question, but also from the point of view of financial accounting and reporting (see, e.g., Van Horne, 2009). In this regard, it is hence proposed to carry out the valuation of a customer's credit using a financial model proposed by Peccati L. (1986), that suggests to split up the lump-sum credit in three components: outstanding debt, claim for damages and penalty. Therefore, the aim of the present paper is intended to stress the relation between the proposed financial model and the necessities of a clear and transparent accounting and reporting, and the opportunity to reduce the gap in assessments of the debt of early termination of instalment contracts.
Publication Impact Profile
- Captures
- Mendeley - Readers: 2
Publication details
ReferencesPending
Structured references will appear here after the reference import pass. The count is preserved now so the scholarly record is not incomplete.
View or Download full articleAccess options
SWS access login
Login as SWS Scientific CommitteeLogin as SWS Scientific PartnerLogin as SWS AuthorAuthors and approved SWS contributors will read and export their own linked papers after identity matching by SWS profile, email and SGEM GlobalID.
For librarian assistance: [email protected]
Purchase Instant Access
- Article can be downloaded after successful payment.
- Article may be used according to SWS library access terms.
- Article cannot be redistributed.
