- Misleadingly optimistic, though not illegal, forms of accounting. This can occur because there are a number of accounting transactions that are not subject to regulations or the regulations are ambiguous. Companies sometimes make use of these ambiguities in order to present their financial results in the best light possible. In particular, companies often wish to demonstrate increasing accounting profits and a strong balance sheet. Examples of transactions in which creative accounting has taken place concern consignment stocks and sale and repurchase agreements. In these contexts, creative accounting will involve the separation of legal title from the risks and rewards of the activities, the linking of several transactions to make it difficult to determine the commercial effect of each transaction, or the inclusion in an agreement of options, which are likely to be exercised. Such policies are often referred to as off-balance-sheet finance or window dressing. Creative accounting is now less prevalent than it was in the 1980s. This is due both to a number of scandals that have raised the profile of issues such as corporate governance and the responsibilities of auditors, and to the activities of the Accounting Standards Board and the Urgent Issues Task Force, which have addressed some of the worst abuses.
Accounting dictionary. 2014.
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creative accounting — ➔ accounting * * * creative accounting UK US noun [U] (also creative accountancy) ► ACCOUNTING the use of methods of recording financial information about a company, etc. which are legal but which do not show the real situation clearly, usually… … Financial and business terms
Creative Accounting — Accounting practices that follow required laws and regulations, but deviate from what those standards intend to accomplish. Creative accounting capitalizes on loopholes in the accounting standards to falsely portray a better image of the company … Investment dictionary
creative accounting — or creative accountancy see ↑creative above. • • • Main Entry: ↑create * * * creative accounting UK US noun [uncountable] business the practice of showing financial information in a way that gives a false idea but is not illegal Th … Useful english dictionary
Creative accounting — Cooking the books redirects here. For the Black Books episode, see Cooking the books (Black Books episode). Creative accounting and earnings management are euphemisms referring to accounting practices that may follow the letter of the rules of… … Wikipedia
Creative accounting — The manipulation of *financial statements through the use of imaginative or unusual accounting techniques. Creative accounting techniques include, among other things, the following: (i) extension of the *amortization periods of *long term assets… … Auditor's dictionary
creative accounting — Misleadingly optimistic, though not illegal, forms of accounting. This can occur because there are a number of accounting transactions that are not subject to regulations or the regulations are ambiguous. Companies sometimes make use of these… … Big dictionary of business and management
creative accounting — N UNCOUNT (disapproval) Creative accounting is when companies present or organize their accounts in such a way that they gain money for themselves or give a false impression of their profits. Much of the apparent growth in profits that occurred… … English dictionary
creative accounting — noun Financial accounting practices which are usually not explicitly illegal, but which are unorthodox, imaginative, usually misleading, and of questionable ethics. Italy’s public deficit is wi … Wiktionary
creative accounting — This term refers to the presentation of a company s results in a way that, although generally legal, glosses over the problems and makes the results appear better than they are. It was suggested that some creative accounting might help to… … English Idioms & idiomatic expressions
creative accounting — /kriˌeɪtɪv əˈkaʊntɪŋ/ (say kree.aytiv uh kownting) noun the structuring or adapting of accounts to meet a desired outcome, to an extent that is misleading but not illegal: *The … government did itself no favours by exaggerating early spending… … Australian English dictionary