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BBC accused of concealing costs: comparisons to Enron have been made in Parliament.

Document Cited in Related
Vincent
AuthorHayward, Cathy
PositionFinancial Reporting

The BBC has come under fire for altering its accounting practices in this year's annual report. Instead of including costs such as news-gathering, marketing and publicity in individual channel budgets, as in previous years, the corporation has reported these costs separately.

The decision prompted Chris Bryant, MP for Rhondda and a member of the Commons culture committee, to compare the BBC's annual report to something that Enron might have produced. Rival broadcasters claimed that the changes hid the real costs of the corporation's expansion into digital broadcasting and of its spending on BBC1. If overheads had been included in BBC1's budget, expenditure on the channel would have topped 1 billion [pounds sterling] for the first time and the cost of digital TV would have exceeded 400 million [pounds sterling], compared with the 280 million [pounds sterling] cited in the report.

But the BBC insisted that the move was intended to make its figures more transparent. "We have changed the way these figures are reported to mirror the way we report internally," a spokesman told Financial Management. "In the past we allocated a certain percentage of overheads to each channel. We felt this was inaccurate, so now channel costs and overheads are listed separately. There has been...

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