Course · Act II: Due Diligence · Chapter 8
Capitalized expenses fraud
How booking routine repairs as capex lifts EBITDA by the full cost, why free cash flow sees through it, and how invoices and capex against depreciation expose it.
Key terms
- Capitalized cost
- A cost booked as an asset and depreciated over years instead of expensed now. Right for things that last; a trick for routine repairs.
- Forensic accounting
- Accounting as investigation: tracing numbers back to invoices, contracts and bank records to test whether they are what they claim.
“Costs Hiding as Assets” is part of the full course: 6 puzzles on capitalized expenses fraud. Biscuit Barrel is fictional; the frauds in the notes are real, settled cases. Try this act’s free chapter, “Adjusted EBITDA”, first.
“Costs Hiding as Assets” is in Act II: Due Diligence. 6 puzzles, unlimited retries.
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