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This article provides an analysis of the economic incentives and financial reporting for Special Purpose Entities (SPEs) over the last four decades. The analysis explains economic factors motivating business use of SPEs and the origins of SPEs in lease accounting and securitization transactions. Related financial reporting standards are identified and discussed, including the historical shift from a traditional control viewpoint to a primary beneficiary viewpoint for financial reporting for consolidation for SPEs (recently renamed Variable Interest Entities (VIEs) in U.S. Financial Accounting Interpretation 46R). The article also includes illustrative journal entries explaining SPE transactions from both the viewpoint of the creating company(s) and the SPE. Actual financial reporting examples and/or journal entries for SPEs created by Bank of America, General Motors Acceptance Corporation, Lucent Technologies and Alza Pharmaceuticals Corporation are also provided.

This paper aims to report on the development of a novel electrochemical amperometric immunosensor to diagnose early hepatocellular carcinoma (HCC) by detecting the Midkine (MDK) biomarker.

Anti-Midkine antibodies were immobilized covalently through carbodiimides chemistry on carbon screen-printed electrodes modified with carboxylated multi-walled carbon nanotubes. The development process was characterized using cyclic voltammetry, electrochemical impedimetric spectroscopy, Fourier transform infrared spectroscopy and atomic force microscopy. Differential pulse voltammetry was used to investigate the immunosensor performance in detecting MDK antigen within the concentration range of 1 pg/ml to 100 ng/ml.

MDK immunosensor exhibited high sensitivity and linearity with a detection limit of 0.8 pg/ml and a correlation coefficient of 0.99. The biosensor also demonstrated high selectivity, stability and reproducibility.

The developed MDK immunosensor could be a promising tool to diagnose HCC and reduce the number of related deaths.

It is proposed to examine how these two different models of human relations – that of Winnicott and Serres – illuminate features of contemporary organizational life. With these models, one can view recent scandals in the USA, specifically the implosion of the energy firm, Enron. Previous accounts of Enron emphasize the manipulations of income and accounting irregularities; however, it is suggested that the accounting manipulations illuminate features of human relations within and outside the economic firm. As a case study, Enron provides a good example of how the object theories of Winnicott and Serres illuminate aspects of behavior in our contemporary organizations and address problems of postmodernity. Andrew Fastow, former CFO of Enron, is the postmodern subject with pathological splitting behavior. Enron is the playground where Fastow played with quasi‐objects among other postmodern subjects. Enron is also the site where the circulation of quasi‐objects in the form of SPEs suddenly ceased.

The purpose of this paper is to indicate an innovative solution to address the financing issues faced by “Micro-, Small and Medium Enterprises” (MSME) in emerging economies.

Islamic Financial Institutions (IFIs) especially Islamic banks are competing for high net worth individuals, whereas the MSME sector is largely untapped. A collaborative model for IFIs is suggested, to explore the MSME sector. Islamic Non-Banking Financial Institutions (NBFIs) are operating in these markets through their extensive gross route networks. The multistep collaborative model proposes “Special Purpose Entity (SPE)” partially owned by a single Islamic Bank or consortium and NBFI/s. SPEs can be incorporated with a defined scope, focus areas, risk profile, budget and shareholding patterns.

Risk and profit sharing instruments also known as Musharakah and Mudarabah have less than 6 percent share within total financing offered by Islamic banks globally. Risk sharing products offered by Islamic banks are not targeting this sector due to the underdevelopment of instruments, lack of knowledge and resources. Proposed SPEs can operate regionally with a concentration on specific business sectors.

The SPE model would enable Islamic banks to enter the huge MSME market while mitigating risk. On the contrary, it would enable the large segments of emerging economies (bottom 40 percent population of developing nations) to get involved and actively play their role to attain long-term development goals.

It has been said that standards issued by the International Accounting Standards Board (IASB) are more congruent with a principles-based approach to standards setting than those of the Financial Accounting Standards Board (FASB). Revelations concerning accounting manipulations at Enron Corp., and the ensuing scandal resulting from these revelations, have prompted the FASB to reassess its approach to accounting standards setting with the possible intent of moving FASB standards-setting processes closer to a principles-based approach. One area that IASB standards tend to emphasize more than FASB standards is the concept of substance over form. The bankruptcy of Enron Corp. provides a vivid illustration of how companies may use the legal form of transactions to obscure their economic substance. The purpose of this chapter is to examine the concept of substance over form by investigating Enron’s use of misleading accounting practices in the following areas: (1) off-balance sheet financing; (2) revenue recognition; and (3) financial statements disclosures. In these three areas of accounting concern, the chapter sets forth the relevant US Generally Accepted Accounting Principles (US GAAP) requirements, along with the ways in which Enron manipulated GAAP while concealing the economic substance underlying the transactions. It is the argument of this chapter that had the concept of substance over form been properly applied at Enron, investors and creditors would have been provided with a more realistic view of the company’s financial position and its results of operations, perhaps avoiding what became the one of the largest corporate bankruptcies in US history. The conclusion is that the FASB should focus on the concept of substance over form as it contemplates moving toward a principles-based approach to accounting standards setting.

Commercial real estate (CRE) indicators typically include asset deals and exclude share deals. This study aims to explore the phenomenon of real estate share deals and assess whether omitting these transactions results in indicators that do not accurately reflect the market.

Various registers in the Netherlands were used to estimate transaction volumes, total values and price developments of both share and asset deals. Share deals are company transfers and its transactions cover more than real estate. To estimate the contribution of real estate in share deals, valuations were used.

In the Netherlands, share deals are most prominent for rental dwellings. Adding share deals to volume and value indicators seems required. In price development estimates, significant differences were found for dwellings between share and asset deals. Price indices should, therefore, also include share deals, but in practice this is difficult and has little impact on the outcomes due to the low weight of share deals.

Legislation has a major impact on choosing a share or asset deal. The significance of share deals is expected to vary amongst countries. Performing similar research in other countries will contribute in harmonising real estate indicators.

Statistical agencies face many challenges in the construction of CRE indicators. This study provides statisticians knowledge that can be used to evaluate possible data gaps.

This is the first study to estimate indicators of real estate share deals and compare these to asset deal indicators.

The authors look at the way in which Enron used hedging techniques before the corporate collapse of the organization triggered a crisis of confidence in US business practices and standards. They provide an analysis of how the system was structured and show how the transactions worked before analysing the roots of the company’s downfall.

The purpose of this study is to examine the effect of consolidating off-balance sheet entities on firm-level investment efficiency. Financial Accounting Standards Board Interpretation No. 46, consolidation of variable interest entities – an Interpretation of ARB No. 51 (FIN 46) is used as a quasi-exogenous shock to financial reporting in this study.

The authors empirically test the change of investment efficiency for a sample of firms affected by FIN 46 in the post-FIN 46 periods. In the regression, a group of matched pairs selected from unaffected firms is used as the control sample and firm characteristics are used as control variables.

The authors find that firms affected by FIN 46 experience improvement in investment efficiency after adopting the standard compared to unaffected firms. The authors also document that FIN 46 firms’ level of investment decreases after FIN 46 compared to unaffected firms. These empirical results suggest that the improvement in investment efficiency is likely to be achieved by the reduction in over-investment. Further analyses show that amongst the affected firms, firms consolidating off-balance sheet special purpose entities (SPEs) improve investment efficiency mainly by reducing over-investment, whereas firms avoiding the consolidation of SPEs do not display such tendency.

This study contributes to the literature on the relation between financial reporting and investment efficiency, as well as the literature on the impact of FIN 46. To the best of the authors’ knowledge, this study is the first to examine the relation between the consolidation of off-balance sheet entities and investment efficiency.

Special purpose entities, generally known as SPEs, have been the bane of everyone in the risk management and the asset management business. But they can also be extremely useful. Now, post‐Enron, further rules have been put into place to ensure that SPEs are clearly identifiable and their purpose can be transparent. The author examines how these new rules will work and assesses the likelihood of success.