creative accounting investment & finance definition
Using one or more accounting options to present
financial results in the most favorable light. Although creative accounting is
not illegal per se, if the rules are pushed too far, a corporation may run into
trouble with regulatory authorities. If particular creative accounting
techniques become too popular, the Financial Accounting Standards Board or
another agency with regulatory authority may change the rules.
See creative accounting in Wall Street Words
The use of aggressive and/or questionable accounting techniques in order to produce a desired result, generally high earnings per share. Creative accounting may include selling assets with a low cost basis, shipping unusually large quantities of product near the end of the year, and failure to write down inventories that have declined in value.
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