CREATIVE ACCOUNTING Definition

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CREATIVE ACCOUNTING is slang for the concept of maintaining accounts giving possibly illegal or dubious benefits to the entity for which the accounts are maintained.

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EXCESS EARNINGS METHOD is a specific way of determining a value indication of a business, business ownership interest, or security determined as the sum of a) the value of the assets obtained by capitalizing excess earnings and b) the value of the selected asset base. Also frequently used to value intangible assets.

NEGATIVE CASH FLOW is where expenditures required to maintain an investment exceed income received on the investment, i.e. spending in a business is greater than earnings.

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