Creative Accounting in Eastern Europe: the Case of the Polish Port Companies
During 1991, a large number of small companies was created to run the operational activity of the Polish seaports, which was until then monopolized by state-owned enterprises. The major part of the shares is held by the employees. Leasing-techniques are used to solve the problem of financing the infrastructure. Although the profit-margins are relatively modest, the return on total assets is rather important because the infrastructure does not appear on the assets-side of the privatized companies. As a consequence of what we call leasing-leverage, the return on equity reaches almost astronomic heights. In the conclusion we indicate the potential dangers of this situation; the financial construction does not solve the ownership-problem of the assets, can lead to only very short-term based decisions and does not guarantee continuity when the assets have to be replaced.
Year of publication: |
1998
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Authors: | Bernacki, Dariusz ; Reyns, Carl |
Published in: |
European Research Studies Journal. - European Research Studies Journal. - Vol. I.1998, 2, p. 49-59
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Publisher: |
European Research Studies Journal |
Saved in:
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