Accounting Essay Example | Topics and Well Written Essays - 2000 words - 9

Accounting - Essay ExampleAccording to Bierman 24 besides building power plants, buying and selling of natural gas and electricity the company as well developed new markets like inter salary bandwidths, weather futures, pulp and paper business, water plants and oddball products which provided shell out time for marketers which rocketed its financial incomes. Between the periods of 1995 to 2000, its revenues rose from $9 billion to an impressive $100 billion. The company win Americas most innovative company by Fortunes Most Admired Companies Survey for sestet years straight which added to its successful reputation.The accounting governing body required that the companys future loot were to be estimated at present value based on the signing of its long term contracts. The system was introduced by the joining CEO Jeffery Skilling, who ordered the companys reporting system to be changed from its essential sales and supply of its natural gas to the new system. The mark to market ac counting estimations were in consultation to the future net value of the cash flows which were often difficult to predict. This included estimated Enrons projects incomes that were irrespective of whether they were have or not and if changes were made like additional losses or incomes, they would be incorporated in subsequent periods. Enron Incorporation was the first non financial company to be given approval by the Securities and transfigure Commission (SEC) use the system. Due to the numerous discrepancies in matching their cash and profits the shareholders were given misguided reports. Therefore, a strategy to appease the investors was created (Bierman 45).Based on Bierman 55 the company executed pressure on its traders in order to forecast low discount rates and high future cash-flows on long contracts with the company. In essence, the difference margin between the original paid value and the present calculated net value was the companys profit. Contrarily, the estimated n et