Everyone deserves a second chance or “mulligan,” as they say in golf. But lenders become understandably uneasy when borrowers reissue their financial statements. They wonder, “Why couldn’t they get it right the first time?” or “What are they trying to hide?” For most borrowers, financial restatements result from an honest mistake or misinterpretation of accounting standards, rather than from incompetency or fraud. But that’s not always true, as this hypothetical example points out.
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Topics: Commercial Lenders, lease accounting, reissued financial statements, restatements, Uncategorized