Enron's SPEs, Andersen, the SEC and FASB. (Trends & Analysis).(special purpose entitites)(Brief Article)(Statistical Data Included)

Publication: Oil and Gas Investor

Publication Date: 01-FEB-02

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COPYRIGHT 2002 Access Intelligence, LLC.

Witnesses testifying before two House Financial Services Committee subcommittees explained some of the fundamental problems with Enron Corp.'s financial reporting.

A December 12 joint hearing of its Oversight and Capital Markets subcommittees featured testimony by Robert K. Herdman, the SEC's chief accountant, and Joseph F. Berardino, a managing partner and chief executive officer at Andersen LLC.

Enron's November 8 filing with the SEC disclosed that three previously unconsolidated special purpose entities (SPEs) should have been included in its consolidated financial statements, according to Herdman.

An SPE is an entity created by a sponsor to carry out a specified purpose or activity, such as to consummate a specific transaction or series of transactions with a narrowly defined purpose. They are commonly used as financing vehicles in which assets are sold to a trust or similar entity in exchange for cash or other assets funded by debt issued by the...

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