-----------------------------CONSERVATIVE ---- AGGRESSIVE Depreciation Method —Accelerated------ Straight Line Inventory Method -------LIFO-------------- FIFO Advertising Costs --------Expense--------- Capitalize Loss Contingencies -----Accrue Loss------ Disclose in footnote What else should we know under conservative/aggressive accting?
Revenue Recognition off the top of my head. The percentage of completion method i think is more aggressive and the completed contract method is conservative.
Depreciation Method could be debated. Accelerated Depreciation will be more aggressive earlier on and less aggressive in the latter part of the life of the asset.
Agree, everything I have read up to now has classed straight line as the conservative choice vs accelerated.
I agree it is debatable, however, if I had to choose between straight line or accelerated as being conservative, I would pick accelerated. Page 165, FSA book, “Accelerated depreciation is sometimes referred to as a ‘conservative’ accounting choice because it results in lower net income in the early years of asset use”