Don Irving runs a loan syndicate.

He acquires money from lenders and uses that money to fund capital ventures.

When loans are repaid, the money is collected by Irving, who then repays the other members of the syndicate.

Irving currently accounts for the full amount of outstanding loans, including the portion provided by other syndicate members, as a loan receivable on the company's balance sheet.

He is about to be audited for the first time and wants to make sure that all of his accounting practices follow GAAP.

Required:

Research the appropriate GAAP and prepare a memo to Irving stating whether this treatment is appropriate and citing your sources.