FTX’s latest bankruptcy filing is a miserable read for customers. The new chief executive of the collapsed cryptocurrency exchange, insolvency veteran John Ray, uncovered giant financial gaps and signs of looting. Formidable backers such as Temasek and Sequoia could have stopped it with some basic oversight, but at least they now have a chance to never make the same sloppy mistakes again. Ray’s first in-depth account, submitted to the court on Thursday, reveals a brazen lack of controls and governance. Financial statements dated to Sept. 30, when founder Sam Bankman-Fried was in charge, contain no record of customer liabilities at either the

Lyft is making an optimistic tweak to the accounting lexicon. The ride-hailing firm has inserted the concept of “contribution” into its initial public offering prospectus. It’s a metric that’s supposed to represent a steady-state level of profitability, excluding the costs associated with growth. Lyft’s take on it, though, is for a world that doesn’t exist. The problem for Lyft, its larger rival Uber Technologies and the likes of trendy office-space provider WeWork is that profit by any standard measure is absent. That makes valuation a crapshoot and deters some investors. Even adjusted EBITDA, which involves usually flattering tweaks, is deep

For March 5, 2018, our forensic accounting red flag comes from a specialty pharmacy company with rising supplier concentration. We pulled this highlight from yesterday’s research of 133 10-K filings, from which our Robo-Analyst technology collected 20,292 data points. Our analyst team used this data to make 3,309 forensic accounting adjustments with a dollar value of $434 billion. The adjustments were applied as follows: 1,415 income statement adjustments with a total value of $38 billion 1,370 balance sheet adjustments with a total value of $167 billion 524 valuation adjustments with a total value of $228 billion Figure 1: Filing Season

Daniel Loeb may be spinning his Honeywell International story a bit too far. The activist investor wants the $100 billion conglomerate to hive off its aerospace unit. That could be an option, but Loeb’s pitch that it would boost shareholder value by $20 billion is a stretch. Aerospace is Honeywell’s largest business, accounting for around 37 percent of the company’s $39 billion of revenue last year. But the unit’s sales have on average grown at just 0.6 percent annually over the past five years, according to Credit Suisse. Loeb says this is why Honeywell trades at 18.5 times estimated earnings

Sir David Tweedie, then Chairman of the IASB said, “One of my great ambitions before I die is to fly in an aircraft that is on an airline’s balance sheet."