In the article extract about GE (below), the FREQ perspective on it would be: I...
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Accounting
In the article extract about GE (below), the FREQ perspective on it would be:
I was sometimes asked to squirrel away excess earnings in fake accounts with made-up names, to be used when earnings were down in later months, he said. One such account was called Plug. New York Times, 6 August 2009
a.
Persistence: squirreling away excess earnings in fake accounts with made-up names, to be used when earnings were down in later months makes earnings look persistent.
b.
Conservatism: the earnings for the year in which the squirreling took place would be overstated.
c.
Earnings management: the earnings for the year in which the squirreling took place would be overstated.
d.
Faithful representation: squirreling away excess earnings this year and future period earnings when it is used faithfully represents the earnings of the firm.
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