New measure from accounting watchdog completes crackdown

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The Independent Online
THE Accounting Standards Board has completed its crackdown on financial engineering excesses with today's publication of a standard outlawing companies from including provisions in their accounts unless they have an obligation to meet such liabilities as pollution or restructuring costs.

Financial Reporting Standard 12 is designed to spell the end of "big bath" accounting where organisations made huge provisions for future reorganisations and then fed them back into income over several years with the aim of smoothing accounts.