Monday, June 22, 2009

‘Clean up’ the balance sheet

Books of Account
Financial Accounting for Managers
T. P. Ghosh
( http://www.taxmann.com/ )

Incomplete ‘big bath’

“The management would begin writing off every expense and asset they could imagine. This may help them to settle all previous accounting fudging, and, as a result, future expenses are reduced significantly, and naturally earnings increase. In other words, the company is taking a big bath in the worst year so it can wipe its slate clean,” explains T. P. Ghosh in Financial Accounting for Managers, fourth edition.

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