Well, today's Corporate Governance case was about Restoring Trust at WorldCom - So, apart form the Richard Breeden's recommendation report and its various aspects, Prof Nieves also discussed what the accounting scandal was all about - and then the topic of leases came up.
The question that the discussion eventually landed was : when even today many large corporations put their long term leases as operating leases and this is not just airline operators, but also banks and other firms alike, are we still providing loopholes for scandals to occur?
Of course, Prof Nieves was kind enough to discuss the differences between capital leases and operating leases with the class and remind us of what we had seen previously in term one class of financial accounting, but at the same time she also discussed the current state of regulations in this regards, and what the authorities are working on currently to address the situation. The Right-to_use clause among other things was mentioned.
And then, during the last session of the Real Estate Investment class today, where Prof Cristina discussed about various financing options for Real Estate Projects, this same topic of operating leases again came up. This time, to discuss advantages of the Sale-and-Lease-back method of financing, that many firms use. In fact, we ended up discussing the benefits of operating leases in this regards :-)
Two different perspectives with respect to two different arms of a corporation, by two different stakeholders - yet the central issue was the same today - operating leases :-)
Still working on the Corporate Governance final report, and I may take a day more to make it submission worthy - nevertheless, a good start of the week, I must say :-)
The question that the discussion eventually landed was : when even today many large corporations put their long term leases as operating leases and this is not just airline operators, but also banks and other firms alike, are we still providing loopholes for scandals to occur?
Of course, Prof Nieves was kind enough to discuss the differences between capital leases and operating leases with the class and remind us of what we had seen previously in term one class of financial accounting, but at the same time she also discussed the current state of regulations in this regards, and what the authorities are working on currently to address the situation. The Right-to_use clause among other things was mentioned.
And then, during the last session of the Real Estate Investment class today, where Prof Cristina discussed about various financing options for Real Estate Projects, this same topic of operating leases again came up. This time, to discuss advantages of the Sale-and-Lease-back method of financing, that many firms use. In fact, we ended up discussing the benefits of operating leases in this regards :-)
Two different perspectives with respect to two different arms of a corporation, by two different stakeholders - yet the central issue was the same today - operating leases :-)
Still working on the Corporate Governance final report, and I may take a day more to make it submission worthy - nevertheless, a good start of the week, I must say :-)
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