Rights of Use

A type of swap is represented
by swapping capacity on networks
using instruments called
“indefeasible rights of use”, or IRUs.
Companies buying an IRU might book the
price as a capital expense,
which could be spread over a number of
years. But the income from IRUs could
be booked as immediate revenue,
which would bring an immediate
boost to the bottom line. 

Technically, the practice is within
the arcane rules that govern financial
derivative accounting methods, but only
if the swap transactions are real
and entered into for a genuine
business purpose.