As an accountant can you tell me if I am reading the report...

As an accountant can you tell me if I am reading the report right. As BRTV was a subsidiary that did not have to provide its financial reports to BIG un shareholders (but should have provided something to the Auditors), on the surface the 4c’s can be deemed correct as there was cash coming in to Big un irrespective of the fact that BRTV was realistically drawing down on a convoluted credit facility. If this is the case then this was set up specifically to hide the inner workings of the company and to also provide a way for management to draw additional fees paid by BRTV and then get their salaries from Big un on top of that. As Big un management knew about this structure then it is clear cut that they were making statements to mislead the public (deferred revenue, “minimal additional costs”). It is similar to setting up a hidden account to put all your losses into and show the world only your profits, while patting yourself on the back with a job well done. Nick Leeson did that at Barings Bank and was sent to prison!