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Title: Creative accounting in Eastern Europe : the case of the Polish port companies
Authors: Bernacki, Dariusz
Reyns, Carl
Keywords: Harbors -- Accounts -- Poland
Financial leverage
Issue Date: 1998
Publisher: University of Piraeus. International Strategic Management Association
Citation: Bernacki, D., & Reyns, C. (1998). Creative accounting in Eastern Europe : the case of the Polish port companies. European Research Studies Journal, 1(2), 49-59.
Abstract: During 1991, a large number of small companies was created to run the operational activity of the Polish seaports, which was until then monopolised by state-owned enterprises. The major part of the shares is held by the employees. Leasing-techniques are used to solve the problem of financing the infrastructure. Although the profit-margins are relatively modest, the return on total assets is rather important because the infrastructure does not appear on the assets-side of the privatised companies. As a consequence of what we call leasing-leverage, the return on equity reaches almost astronomic heights. In the conclusion we indicate the potential dangers of this situation; the financial construction does not solve the ownership-problem of the assets, can lead to only very short-term based decisions and does not guarantee continuity when the assets have to be replaced.
ISSN: 11082976
Appears in Collections:European Research Studies Journal, Volume 1, Issue 2

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