Aggressive vs. Conservative - Schweser vs. CFAI Definition into, its, accounting, referring, something

Benjiko

Anyone else run into this problem where when CFAI refers to “Aggressive” accounting choices they are referring to accelerated depreciation, shorter lives, etc. wheras Schweser happens to refer to this as “Conservative”?
Anyone else find this confusing or am I missing something?
Example:
CFAI:
“On average, however, an inventory buildup is a good indication that the company has problems with managing its inventory levels and/or has not been sufficiently aggressive in
writing down the value of that inventory as the turnover slows.”
(CFA Institute. Level 2 Volume 2 - Financial Reporting and Analysis, 4th Edition. Pearson Custom Publishing 283).
Schweser:
“Firms may adopt aggressive accounting practices that overstate the value of earnings by, for example, accelerating revenues to the current period or deferring expenses to a later period. Current earnings will be higher, but future earnings will be lower”

PalacioHill

jdane
note that CFAI is not calling it an aggressive accounting choice. It is saying that company has not been aggressive enough in writing down its inventory appropriately, and thus has more inventory on its books.
I think CFAI and Schweser (not that I use them this time round) are consistent. Aggressive accounting choice is something that makes current period earnings Higher.
This is on Page 252 of the curriculum - passage on the bottom of the page:
Conservative choice - makes current period INCOME LOWER.
Accelerated Depreciation, a lower salvage value - hence higher Depreciation expense, a lower discount rate on Pension plans - all increase expense, thus reduce income. These are Conservative choices. Higher allowance for Inventory obsolescence, higher allowances for doubtful accounts.
Aggressive choice - makes current period INCOME HIGHER.
Straight Line depreciation, higher salvage value, higher discount rate on pension plans - reduce periodic expenses, increase Earnings - these are Aggressive Choices.

liquidity

Thanks cpk, appreciate the help.