Message-ID: <9885926.1075849840915.JavaMail.evans@thyme>
Date: Wed, 31 Jan 2001 03:18:00 -0800 (PST)
From: thomas.myers@enron.com
To: scott.earnest@enron.com, d.hall@enron.com, brent.price@enron.com, 
	sheila.glover@enron.com, kevin.sweeney@enron.com, 
	eric.groves@enron.com, mike.perun@enron.com, shona.wilson@enron.com
Subject: Inventory Accounting
Cc: sally.beck@enron.com
Mime-Version: 1.0
Content-Type: text/plain; charset=us-ascii
Content-Transfer-Encoding: 7bit
Bcc: sally.beck@enron.com
X-From: Thomas Myers
X-To: Scott Earnest, D Todd Hall, Brent A Price, Sheila Glover, Kevin Sweeney, Eric Groves, Mike Perun, Shona Wilson
X-cc: Sally Beck
X-bcc: 
X-Folder: \Sally_Beck_Nov2001\Notes Folders\Discussion threads
X-Origin: BECK-S
X-FileName: sbeck.nsf

As follow up from our staff meeting on Monday, here's the SEC position on 
inventory accounting;

Energy trading companies that apply EITF 98-10 (which Enron does), can carry 
inventory purchased from non affiliates at fair value (spot price).  

I spoke with John Vickers and he agrees that EGM is appropriately utilizing 
fair value accounting for it's inventory acquired from 3rd parties.  We do 
need to identify situations where we acquire inventory from an affiliate and 
determine appropriate treatment.  I am aware of this situation in Crude & 
Products (Scott, I'll set up a meeting to discuss), however please advise if 
there are any situations outside of Crude & Products that may be of issue.

Tom 3-0475