The debt covenants in TCBYs loan agreement do not mention explicitly the accounting methods the company must use when it prepares financial statements for submission to the lender Required Why dont lenders require the use of specific accounting methods rather than letting management pick from among...

There are several reasons lenders may not want to require borrowers to use specific accounting metho ...

The debt covenants in TCBYs loan agreement do not mention explicitly the accounting methods the company must

Question:

The debt covenants in TCBY’s loan agreement do not mention explicitly the accounting methods the company must use when it prepares for submission to the lender.

Required:
Why don’t lenders require the use of specific accounting methods rather than letting management pick from among alternatives?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... GAAP
Generally Accepted Accounting Principles (GAAP) is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). While the SEC previously stated that it intends to move from U.S. GAAP to the International Financial Reporting Standards (IFRS), the...