Translation: Accounting Reclassification = Accounting Reclassification.

Simplified Definition: It is the process of "changing the title" of an expense. For example, moving an expense "technician salaries" from the "administrative expenses" category to the "cost of production" category.

What Does It Mean for You?

  • Number Games: Companies may use it to make some financial ratios look good without changing the actual reality of the final profit.

Common Question: Is this change legal?

  • Answer: Yes, as long as it is done according to accounting standards and is disclosed in the notes, but it requires a "sharp eye" from the analyst to discover it.