Creative accounting

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creative accounting Use of unorthodox 'massage parlor' techniques which, while following provisions of GAAP, paint a desired (negative or positive, as the case may be) picture of a firm's finances. For example, selling an asset (whose market value is high but book is low) to create non-operating profit that offsets operating loss. Unlike cooking the books, creative accounting is generally legal. Euphemistically also called financial engineering or earnings management. See also creative financing. creative accounting is in the Accounting & Auditing, Banking, Commerce, Credit, & Finance, Corporate, Commercial, & General Law and Entrepreneurship, Management, & Small Business subjects creative accounting appears in the definitions of the following terms: opportunistic behavior, price to sales (PS) ratio, cooking the books, financial engineering, and massaging the figures.

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