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November 12, 2012 by Mark DeVine

Balance Sheet Dressing

A consulting firm’s examination of close to 1,000 public companies suggests roughly half are focused on short-term, period-end gaming meant to dress up balance sheets.  REL analyzed the filings of 976 of the largest public companies to look for indications that companies are improving the appearance of the balance sheet.  The results of the analysis is that more than 450 of the companies engaged in discounting, enhanced payment terms with customers, stepped-up collection activities, and delayed payment to suppliers.  These actions were to increase the working capital performance. 

There are a number of reasons why a company would try to dress up their balance sheet.  Accounting standards have made it more difficult for companies to commit these actions, but some still find a way.  Although accounting standards dictate the conditions that must be present for recognizing revenue and booking payables and receivables, the actions examined in this study are pinned on ethics and business practices.

To find out how we can help you avoid dressing up your balance sheet, make an appointment with us today at 401-254-0151.  We look forward to hearing from you.

Filed Under: Taxes

About Mark DeVine

I have been in the tax and accounting profession since 1989. Before founding my own firm, I worked with the international accounting firm of KPMG, the Fleet Private Clients Group, and Bank of New England. I am also a member of the American Institute of Certified Public Accountants and the RI Society of CPAs.To discover how we can help you with taxes, payroll, bookkeeping and more, give me a call at 401.254.0151, or click the link to schedule your free 30 minute consultation today.

Contact Us

DeVine & Associates, LLC
386 Market Street, Unit #3
Warren, RI 02885-1627
Tel: 401.254.0151
Fax: 401.289.2418

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  • Financial Statement Preparation
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Contact DeVine & Associates

Mark G. DeVine, CPA, CGMA
386 Market Street, Unit #3
Warren, RI 02885-1627
Tel: 401.254.0151
Fax: 401.254.0152

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