Darkbeer
03-25-2004, 10:36 PM
http://http://www.nytimes.com/2004/03/26/business/26norris.html
QuikQuote: Under American accounting rules, Euro Disney ended its fiscal year last September with $2.5 billion in debt and only $69 million of shareholders' equity. But Euro Disney did not mention those figures in the reports it gave to shareholders. Instead, it cited the French accounting rules, which are lenient when it comes to lease accounting and made the company look like a model of health, with debt of 864 million euros ($1 billion) and shareholders equity of 1.1 billion euros ($1.2 billion). Next year, Euro Disney will have to convert to stricter international accounting rules.Some of Enron's most outrageous accounting involved the abuse of so-called special-purpose entities, where it hid debts. Disney's old footnote disclosures were not deceptive, but under the new American rules, it must put Euro Disney's debt on its balance sheet this year. Michael D. Eisner, Disney's chief executive, does not need more bad news. But Disney may have to swallow a substantial write-down to get a deal with the banks that reduces Euro Disney debt to a manageable level.
QuikQuote: Under American accounting rules, Euro Disney ended its fiscal year last September with $2.5 billion in debt and only $69 million of shareholders' equity. But Euro Disney did not mention those figures in the reports it gave to shareholders. Instead, it cited the French accounting rules, which are lenient when it comes to lease accounting and made the company look like a model of health, with debt of 864 million euros ($1 billion) and shareholders equity of 1.1 billion euros ($1.2 billion). Next year, Euro Disney will have to convert to stricter international accounting rules.Some of Enron's most outrageous accounting involved the abuse of so-called special-purpose entities, where it hid debts. Disney's old footnote disclosures were not deceptive, but under the new American rules, it must put Euro Disney's debt on its balance sheet this year. Michael D. Eisner, Disney's chief executive, does not need more bad news. But Disney may have to swallow a substantial write-down to get a deal with the banks that reduces Euro Disney debt to a manageable level.