Sandbagging - What is it and has it been stopped?

Jul 29, 2008 0 Replies

I've been mentioned the term sandbagging and told companies used to be rife of companies having 'exceptional delays' and profit falling therefore over 2 accounting periods.



Eg: A sells to B, Asset X for £5 million - falling in 2 accounting periods £2.5m each. Now it's agreed that £4.8m will be paid now in 1st period.



The company could apparently 'over reserve', and carry that excess over to the next accounting period before 'washing' it into the P & L.



Is this still the case has there been anything passed in terms of FRSs to stop this practice?


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