X hits on this document

Powerpoint document

Forensic Accounting, Forensic Techniques, and Fraud Detection Copyrighted 2001 D. Larry Crumbley, ... - page 188 / 352

1501 views

0 shares

1 downloads

0 comments

188 / 352

188

© D.L. Crumbley

Companies hide debt by these techniques:

1.

Using the equity method (rather than Trading Security and Available for Sale methods). Nets the assets and liabilities of the investee.

2.

Lease accounting (arguing that leases are operating leases). Understates 10 to 15% .

3.

Pension accounting – netting of the projected benefit obligation and the pension assets. Must unnet them.

Hiding debt inside Special – Purpose Entities – trillions of dollars of SPE debt is off the books (e.g., securitization, SPE borrowings, synthetic leases).

Readers can make analytical adjustments by searching footnotes for 1,2, and 3. But no disclosures for asset securitization, SPE borrowings, and synthetic leases.

Source: J.E. Ketz, Hidden Financial Risks, John Wiley & Sons, 2003

Hiding Debt

Document info
Document views1501
Page views1522
Page last viewedSun Dec 04 03:52:13 UTC 2016
Pages352
Paragraphs4554
Words31092

Comments