Big bath and PNFC: Difference between pages

Revision as of 18:29, 1 September 2015

Private Non-Financial Corporation, as defined by the Bank of England, are companies that produce goods and/or provide non-financial services.

They are mainly public limited companies, private companies and partnerships where these are distinct from their owners and not owned by government.

PNFCs are distinguished from monetary financial institutions and OFCs.

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-''Accounting - manipulation''.
+Private Non-Financial Corporation, as defined by the Bank of England, are companies that produce goods and/or provide non-financial services.
-'Big bath' provisions are, or were, an accounting manipulation designed to boost profits and improve trends in future reporting periods.
+They are mainly public limited companies, private companies and partnerships where these are distinct from their owners and not owned by government.
-An excessive 'big bath' provision is made in the earlier reporting period, reducing net assets and profits (or increasing losses) in the earlier 'bad' year.
+PNFCs are distinguished from monetary financial institutions and [[OFC]]s.
-The consequence is to artificially increase profits in later periods.
-'Big bath' provisioning was particularly attractive to new managements as a way to assign more blame to their predecessors, while claiming more credit for subsequent, partly artificial, improvements.
-Modern financial reporting standards aim to prevent such manipulations.
 == See also ==
-* [[Conceptual framework]]
+*[[Monetary financial institution]]
-* [[Provision]]
+*[[Central bank]]
-* [[Prudence]]
+*[[OFC]]
+*[[NFC]]
-[[Category:Accounting,_tax_and_regulation]]
+*[[Bank of England]]
-[[Category:The_business_context]]