Cookie Jar Accounting

What does it Mean? An accounting practice where a company uses generous reserves from good years against losses that might be incurred in bad years.
Investopedia Says... This gives the sense of "income smoothing", because earnings are understated in good years and overstated in bad years. You may have heard of companies taking special charges or write downs, well that's just another flavor of cookie jar accounting.

Terms Related Links

Accounting
Accounting Noise
Cook the Books
Earnings
GAAP
Net Income
Restatement
The Beneish Model
Voodoo Accounting

Terms Related Links
Cooking The Books 101 - To spot the signs of earnings manipulation, you need to know the different ways companies can inflate their figures.

Introduction To Fundamental Analysis - Learn this easy-to-understand technique of analyzing a company's financial statements and reports.

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