Severn Trent Water

Baldytyke88

One of England's top-rated water companies is using an accounting trick to artificially inflate its balance sheet by more than a billion pounds, BBC Panorama has discovered.

Severn Trent Water claims that an investment is worth £1.68bn in its accounts, when in reality it has no value to the overall business.

I don't know much about company finances, but if Severn Trent can do it so can other companies, if true.

Does the Government need to bring in stricter rules?

https://www.bbc.co.uk/news/articles/cd75nqwdpj7o

penners324

The Panorama programme was utter nonsense.

A check of the company accounts doesn't show any massive increase on their balance sheet.

What has happened and the programme completely missed was a restatement of the nominal share price, which then allowed this £1.6 billion to be moved from shareholder funds (which aren't distributal reserves) to retained earnings (which are distributal reserves).

Baldytyke88

I listened to a radio four article and it mentioned that because of this accounting weaze, they were able to pay more to, their directors/dividends?