The collapse of Australian childcare busi ness ABC Learning has been singled out by CPA Australia in a publicly released video as an example of poor accounting, ethical and governance practices.

Entitled The ABC of a Corporate Col lapse, the video production charts the mis takes that led to the demise of ABC Learn ing, and will be the subject of scrutiny by CPA students and educators globally.

“ABC Learning’s rise and spectacular fall is an example of what happens when a company ignores the fundamentals of sound accounting,” CPA Australia chief ex ecutive Alex Malley said in a statement.

“The video covers the fundamental flaws in the company’s accounting and eth ical and corporate governance issues,” Malley said. “It shows what can happen if these go unchecked.”

In the video, television presenter David Koch takes viewers through the group’s phases of growth, the accounting mistakes made, and the lessons that can be learned from the dramatic implosion.

It names the main reasons for the fail ure as the valuation of intangible assets and goodwill, accounting irregularities and massive, unrealistic growth ambitions.

Meanwhile, corporate governance problems included the use of margin loans by founder and former chief executive Eddy Groves to invest in the business, as well as related party transactions with his relatives, currently under investigation by the Aus tralian Securities and Investments Com mission (ASIC).