http://finance.yahoo.com/news/Demystify-the-Lehman-Shell-nytimes-3544221077.html?x=0&sec=topStories&pos=3&asset=&ccode=
Making unattractive assets disappear from corporate balance sheets was one of the great magical tricks performed by accountants over the last few decades.
Whoosh went assets into off-balance-sheet vehicles that seemed to be owned by no one. Zip went assets into securitizations that turned mortgage loans for poor credit risks into complicated pieces of paper that somehow earned AAA ratings.
As impressive as those accomplishments were, they did not make the assets vanish altogether. If you dug deep enough, you could find the structured investment vehicle or the underlying assets of that strange securitization.
Now there is another possibility in the world of accounting magic. Did accountants find a way to make some assets disappear altogether? Was it possible for everybody with an interest in them to disclaim ownership?
Until recently, it never would have occurred to me that companies would want to do that — particularly if the assets in question were perfectly respectable ones. But now that we have learned Lehman Brothers did it, the question arises of how far the practice went.
Lehman’s reasons for doing it were simple: to mislead investors into thinking the company was not overleveraged. Were other firms doing that? Are they still? Lehman thought not, but no one really knows
