Neither one of you know what the hell you are talking about. There is a big difference between managerial accounting ( for internal accounting users) and financial accounting (for external users). With the example PTO uses, management projected to make a certain amount. Well, hell, they could project anything they want. There is a difference between PROJECTED results and ACTUAL results. But the fact is that NW is a publically traded company and has has to follow the SEC Acts of 1933 and 1934 that regulate securities and the securities market. And one of the regulations is that periodic financial statements for the corporation must be produced with the yearly one audited. These FINANCIAL statements that investors and other parties use to gain important information about a company must be prepared according to GAAP (Generally Accepted Accounting Principles). GAAP consists of SFASs (Statements of Financial Accounting Standards) issued by the FASB (Financial Accounting Standards Board). Almost all companies like NW use accural based accounting- this is recgonize revenue when earned and expenses when incurred to produce that revenue during a certain period (quarter, month, year). NW reported an OPERATING loss of over $100 million since bk using GAAP.
Whodoyouthinkyouare, you used subsidiaries in your example.
In your example, you stated "if corporate inc requires". Well GAAP isn't based on what "corporate inc. requires", it is based on what "corporate inc. earned". When you have a group of companies with their own set of financial statements (like AA, Eagle,AMR investments) that deal with each other under a parent company (AMR), those intercompany transactions are eliminated during the preparation of the parent's (AMR) financial statements.
Again, management projections are internal and irrelevant to the financial statments prepared under GAAP for external users. PTO is just a SCAB that knows nothing of acounting.
