Unformatted text preview: .
Changes in market values are reported in the income statement for
certain financial assets and in shareholders’ equity (component of
Accumulated Other Comprehensive Income) for others
Gains often determined by proprietary formulas depending on many
assumptions about interest rate, customers, costs and prices—
provides opportunities for management to create and manage
Enron often recognized revenue at the time contracts (even private)
were signed based on net present value of all future estimated
revenues and costs.
Profits really tracked price of oil futures—almost perfectly correlated
Profits © 2003, 2005 by the
AICPA The Chewco SPE
Accounted for 80% of SPE restatement or $400
In 1993, Enron and the California Public
Employees Retirement System (CalPERS)
formed a 50/50 partnership—Joint Energy
Development Investments Limited (JEDI)
In 1997, Enron bought out CalPERS’ interest in...
View Full Document