Law Commons^™

Stopping The Enron End-Runs And Other Trick Plays: The Book-Tax Accounting Conformity Defense, Anthony J. Luppino

Faculty Works

In accounting for business transactions in the United States, it has long been the case that keeping two different sets of books (one for financial reporting and one for income tax reporting) is 'generally accepted.' A company can often effect a transaction that in economic substance begins at 'point A' and ends at 'point B,' but account for the path taken in one manner in its financial statements and in a markedly different manner in the company's income tax returns.

Three prominent examples of this accounting divergence that have become subject to public scrutiny are: 'synthetic leases' of real estate …