Accounting policy
AccountingThe specific methods a company chooses when preparing its financial statements.
In plain terms
Disclosed in the first note after the statements, and the fastest way to tell optimistic books from cautious ones.
1492 terms
Glossary
Every term is defined twice: once the way a filing would put it, and once the way somebody would explain it to you across a table. The second one is usually the one that sticks.
Showing 2 terms
Read the full lesson →
Retrospective application
AccountingApplying a new accounting policy, or correcting a prior-period error, as though it had always been in place — which means restating the comparative figures.
In plain terms
The comparative moves, the step is smoothed out and disclosed, and your series stays usable. It is also what triggers the third balance sheet.