How well does the average person understand financial statement manipulation? Sometimes the numbers are gimmicked up because of odd nonsensical transactions, ala Lehman Brothers. Sometimes the numbers are out and out fictionalized. Sometimes investor attention is simply distracted away.
Bob Jensen passed along a post over at the AECM listserv, in which he used a few Barbie dolls to make a point. Sprucing it up just a bit, here’s the story. [Disclaimer: I do not support the "culture of thinness" promoted by Barbie Dolls.]
Lehman Brothers Balance Sheet “Before”
Lehman Brothers balance sheet bloated with too many financial liabilities
Lehman Brothers Balance Sheet “After”
The balance sheet after cash from Repo 105/108 has paid down financial liabilities
SEC’s Mary Schapiro Called to the Rescue
There were no pictures of Barbie as a white knight in shining armor
Switching the subject, just a bit. Over the years, Mattel (producer of Barbie dolls) has used child actors to promote its toys. Recently, it used two of the cutest to present a disclaimer that precedes an interactive edition of its annual report. I can’t embed the video (as much as I’d like to), so click on the following link and press the start button. In my opinion, this is inappropriate. Financial reporting is serious business for serious people. It shouldn’t be made light of. And, after watching this “kid” disclaimer, I think the viewer is happy enough to cut Mattel some slack for whatever follows.
http://corporate.mattel.com
My apologies to the copyright owners of these images. I’ve borrowed without permission. If you come across this page, would you grant me permission to use these images?
Debit and credit – - David Albrecht
Slashdot features many Barbie doll tech stories. Many current designs center around manipulating a dollhouse of “appointments,” but is this really what a house is for?
As they say, a picture’s worth a thousand words.
its so funny because today, i was thinking like, why hasn’t the professor written about ripo 105.
I’ve not written much because I have 51 papers to grade (at about 25 minutes each), 59 final exams to be given then graded, and 18 projects to grade. And to write 2 exams and hold office hours before the test.
When I get started I have at least 3 posts on the repo (105 is for fixed term securities and 108 is for equities). First, I think it is a bad rule because it doesn’t focus on the inevitable liability reduction that follows. I think all repurchases should be accounted for as borrowings. Second, there are some interesting revelations that come out from the Herz letter. Third, the Herz letter leads to some interesting aspects of the standard setter mentailty of neutrality (which is misguided, IMHO). Fourth, the lawsuit has some interesting implications for the audit industry. I’ll have more coming, won’t get to start until Monday, May 3.
[...] Repo 105 Explained With Barbie Dolls – via the Summa-How well does the average person understand financial statement manipulation? Sometimes the numbers are gimmicked up because of odd nonsensical transactions, ala Lehman Brothers. Sometimes the numbers are out and out fictionalized. Sometimes investor attention is simply distracted away. [...]