Carillion Bankruptcy Exposes Increasingly Popular Accounting FlawMark Melin
A financial reporting loophole was evident in the January bankruptcy of Carillion PLC, according to a report from Moody’s Investor Service. To the outside world, the company appeared to be a reasonably healthy concern, but what lies beneath the company’s balance sheet was a “reverse factoring” mess that obfuscated its true liabilities to banks. What is being categorized as an accounting flaw is becoming an increasingly popular method of financial engineering.
In 2016 Carillion . . .
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