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These books need cooking.
MIND THE GAAP

19 creative accounting schemes for money-losing startups

WeWork, the shared-office startup, isn’t just pioneering new ways of working, but new ways of accounting.

In its bond prospectus this week, it introduced a new term that sent accountants’ green eye-shades spinning: “community-adjusted earnings before interest, taxes, depreciation and amortization.” The measure of profit not only subtracts out costs like taxes, but ordinary expenses related to running its business, like marketing and design costs, the Wall Street Journal reported (paywall).

“It shows the economics of our buildings,” according to a WeWork spokesperson. “In other words, if we stopped growth investments, we have a very healthy business running healthy margins. For bond investors, community-adjusted Ebitda is a number they can hold onto.”

The term is also the latest in the creeping expansion of accounting acrobatics favored by businesses eager to hide the fact that they’re losing tons of money. These non-standard measures don’t just torture the English language, but could indicate more worrisome trends at a company, according to research (paywall).

To help startups and other cash-strapped firms more effectively distract analysts and investors from mediocre earnings, Quartz offers the following ideas for pro-forma accounting practices:

EBACE Earnings before all conceivable expenses

EBILT Earnings before inevitable legal trouble

EER Earnings excluding reality

EEG Earnings excluding gluten

ELOL Earnings leaving out losses

EASA Earnings according to sycophantic analysts

EBJC Earnings before John Carreyrou

EWPF Earnings if women were paid fairly

EBAIS Earnings before AI singularity

EBAAI Earnings before Amazon ate our industry

EBACT Earnings before awkward Congressional testimony

EBPB Earnings before pivot to blockchain

EBCDB Earnings before catastrophic data breach

EMFEBT Earnings from moving fast excluding broken things

EBBFVA Earnings before branded fleece vest amortization

EAMAGA Earnings after America Made Great Again

EBLFAW Earnings before life found a way

EBITMCMF Earnings before interest, tax, and mid-century modern furniture

EBLWAEAM Earnings but like what are earnings anyway, man