Aggressive accounting
Accounting choices that stretch out the recognition of costs and pull forward the recognition of income: capitalising instead of expensing, long useful lives, early revenue on long contracts.
How to read the number
Each such choice is lawful on its own; what is troubling is their coinciding in time and direction — all of them in favour of current profit.
When the metric lies
The signs prove no wrongdoing. Their value is in telling you which note to read first, not in handing you a conclusion.
Also known as: earnings management