From the financial analyst's point of view an increase in corporate revenues, over a period of time, is generally considered to be a healthy trend. This is important information for anyone interested in the economic condition and progress of a company. Financial analysts need a point of reference. They need comparative financial statements. Fiction in sales reporting is used to mean the false impression that is gained from some of today's reporting practices. This article will be concerned with three types of situations that may lead to non-comparable, and therefore misleading financial statements namely Non-comparable organizations, Non-comparable time periods and Non-comparable monetary units. It is important for accountants to present financial statements that are free of misleading implications than to be so technically precise that the real economic significance is lost. Comparative financial statements are valuable for estimating what will happen in the future by indicating a trend that can be extrapolated.

Reviews the book "Accounting Theory: Text and Readings," by Levis D. McCullers and Richard G. Schroeder.

Tax allocation procedures used today produce inconsistent treatment on the balance sheet. When the asset's accounting basis is greater than the tax basis as the result of differences in timing, a credit must be carried on the balance-sheet. This credit has variously taken the form of a liability, a reduction in a fixed asset , a reduction in a deferred charge, or even an allocation of retained earnings. As previously mentioned, the major difference has been that due to depreciation. Here, the general practice has been to show the resulting credit as a non-current liability. To many accountants, this treatment is a distortion of the facts. At the moment of liability recognition for accounting purposes, no liability seems to them to exist. The liability may never come into existence, or its amount may be greater or less than the amount originally booked. An acceptable, but not widely followed, alternative has been to credit the accumulated depreciation rather than the liability account in these circumstances.