... would have officially become second-largest corporation in the world, in terms of sales. "Enron's reported revenue was based on its exploitation of a loophole in accounting rules that allowed it to book revenue from huge energy-derivative contracts at their gross value, not their net value as is done with other securities transactions." (Forbes, 1/15/02) Basically instead of reporting the spread ... difference (between bid and ask price), they would report the entire sale price instead. Many energy companies used this accounting style that was legal, but made the numbers look astronomic...

• Word Count: 2824
• Approx Pages: 11
• Grade Level: High School