Earnings Management

Accounting Cushion
An accounting cushion refers to the practice of recording larger provisions for expenses in one fiscal year to minimize expenses in future years. This practice results in understated earnings for the current period but overstates earnings in subsequent periods.
Secret Reserve (Hidden Reserve)
A secret reserve or hidden reserve is an account or fund that is not disclosed to stakeholders, often used by companies to smooth earnings over time.

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.