Volume : VI, Issue : VI, June - 2017

ACCOUNTING CHOICE AND ITS IMPACT ON REPORTED EARNINGS – A NOTE

Dr. Abhishek Ranga

Abstract :

 The current note is prepared to educate readers on the impact of accounting choice, defined as the combined effect of firm’s accounting policy, accounting method and accounting estimate on firm’s reported financial position and financial performance. A set of transaction is taken and various accounting options ranging from selection of accounting policy (inventory valuation and depreciation method) to accounting estimates (creation of provisions, estimating economic life of assets) are considered for calculating earnings (profit or loss). With various combinations of accounting policy, accounting method and accounting estimates thirty two different accounting choices emerged out, for the same set of transaction earnings are calculated. It is observed that few combinations resulted into loss while some resulted into profit, highlighting the impact of accounting choice on reported earnings.

Keywords :

Article: Download PDF   DOI : 10.36106/ijsr  

Cite This Article:

Dr. Abhishek Ranga, ACCOUNTING CHOICE AND ITS IMPACT ON REPORTED EARNINGS – A NOTE, INTERNATIONAL JOURNAL OF SCIENTIFIC RESEARCH : VOLUME-6 | ISSUE-6 | JUNE-2017

Number of Downloads : 501

References :