AS-19 “LEASES” PRE AS-19 ERA Prior to 1.04.2001 the “Guidance Note on Accounting for Leases” was applicable on leasing industries. This Guidance Note was based on the matching principle i.e. the periodic costs comprising of depreciation and lease equalization charges were recommended to be matched with lease rentals so that the net income from a finance lease will show a true and fair view
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Enron: The Smartest Guys in the Room / Lack of Ethics Enron at one time was a Fortune 500 company‚ but in truth it was just a fallacy and a lie for what it truly was‚ an ethically bankrupt company that eventually became a bankrupt company. Henry Taylor‚ a 19th century statesman wrote “Falsehood ceases to be falsehood‚ when the truth is not expected to be spoken”. Enron senior management gets a failing grade on truth and disclosure. The purpose of ethics is to enable recognition of how a particular
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of unearned revenue would be 1.Prepaid Expense - A year long insurance contract a company paid $12‚000 for at the beginning of the year. Since the insurance company owes the company service‚ the expense prepayment is recorded as an asset Journal Entries: debit Prepaid Insurance and credit Cash). 2. Unearned Revenue - A year long subscription of $12‚000 is received in advance by a magazine company. Because the company owes something‚ the unearned revenue is recorded as a liability. 3. Non-cash: These
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1. The Enron executive team including Kenneth Lay‚ Jeffrey Skilling‚ Andrew Fastow and other executives‚ were the key players in the crisis. The business practices they used when creating hundreds of SPE’s and diverting large amounts of liabilities to those off-balance sheet entities. Enron was aware of the minimal accounting guidelines for SPE’s and used them to their advantage. To create such a complex “paper” structure‚ the executives had to have coordinate their plans with the accountants
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Enron Questions 1. How did Enron’s corporate culture contribute to its bankruptcy? Enron’s corporate culture was greedy and arrogant. Arrogance and pride are what mostly contributed to the downfall of Enron. Employees made money for the executives. The company was thought of as a leading company‚ and imagined to be invincible. Once funds were gambled away‚ and the whole got deeper‚ more funds were gambled to attempt to create liquid assets to pay off debt. Eventually‚ it all ran out.
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PRACTICAL ACCOUNTING 1 1. On January 1‚ 2012‚ Revenue Company sold specialized computers costing P760‚000 to Income‚ Inc. for P990‚000. Revenue Company’s trainers present numerous training sessions for Income’s employee during the installation period. Income made a 50% down payment‚ with the balance due upon completion of installation. How much revenue should Revenue Company recognize on its books on January 1‚ 2012? a. P990‚000 b. P760‚000 c. P495‚000 d. P-0- 2. SAMpple Company is an experienced
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Parmalat It has been named as “Europe’s Enron” – the legend that took down Italy’s milk selling company Parmalat and its controlling executives‚ American banks‚ audit firms‚ even politicians and 130‚000 of its helpless small shareholders after the discovery in the year 2003 of the $14 Billion black hole in the company’s finances. The company’s fraud was uncovered when the company failed to pay the cash to the bondholders. Summary: This discovery led to eight years of court cases in Europe
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The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board (PCAOB) to assume the responsibility of overseeing the auditors of public companies. The PCAOB is a private-sector‚ non-profit corporation. It was established to "protect the interests of investors and further the public interests in the preparation of informative‚ fair‚ and independent audit reports". (The PCAOB) Although the PCAOB is a private sector organization‚ it has many government-like regulatory functions. The PCAOB
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it was the "Greed Factor" which drives Enron employees to increase the profits through unethical methods‚ and ultimately causing its downfall. But could it be the opposite? I mean‚ could it be that it was Enron ’s culture and Key Performance Indicators (KPIs)‚ which is to increase the profits and share price that "forced" Enron employees behave in an unethical manner? What circumstances caused them to be unethical‚ really? At first‚ the leader of Enron Finance Corp‚ Jeffrey Skilling recruited
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Accountancy Arthur Anderson Auditors and Enron: What happened to their Texas CPA licenses? Daniel Edelman Texas A&M University-Commerce Ashley Nicholson Texas A&M University-Commerce ABSTRACT This article examines Arthur Andersen‚ its role with Enron‚ and what happened to some of its key players. The demise of Arthur Andersen and Enron was significant. Thousands of people lost their jobs and investments. As a result‚ new laws for publicly traded companies and auditing firms followed. Auditing firms
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