Enron's Accounting System Explained
Feudalism - You have two cows. Your lord takes some
of the milk.
Fascism - You have two cows. The government takes
both, hires you to take care of them, and sells you
the milk.
Communism - You have two cows. Your neighbors help
take care of them and you share the milk.
Totalitarianism - You have two cows. The government
takes them both and denies they ever existed and
drafts you into the army. Milk is banned.
Capitalism - You have two cows. You sell one and
buy a bull. Your herd multiplies, and the economy
grows. You sell them and retire on the income.
Enron Venture Capitalism - You have two cows. You
sell three of them to your publicly listed company,
using letters of credit opened by your brother-in-law at
the bank, then execute a debt/equity swap with an
associated general offer so that you get all four cows
back, with a tax exemption for five cows. The milk
rights of the six cows are transferred via an intermediary
to a Cayman Island company secretly owned by the
majority shareholder who sells the rights to all seven
cows back to your listed company. The annual report
says the company owns eight cows, with an option on
one more.