Chapter 14. Alternative Accounting Policies and Procedures
Various alternative accounting policies and procedures are completely legal and widely used, but may result in significant differences in the values reported on a company’s financial statements. Some people would call this chapter’s topic “creative accounting.”
All financial statements are prepared in accordance with Generally Accepted Accounting Principles (GAAP). But within these accepted principles are a variety of alternative policies and procedures that may be used.
Selection of one policy over another can depend upon management’s judgment and upon circumstance. The financial books can look quite different depending upon which policy is chosen. These alternative accounting policies ...