Define: Window Dressing

UK Accounting Glossary

Definition: Window Dressing

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What is the dictionary definition of Window Dressing?

Dictionary Definition

Window dressing refers to any practice that attempts to make a situation look better than it actually is.

Window dressing has often been used extensively by accountants to improve the appearance of balance sheets.

In the past, banks used to call in their short-term loans and postpone making payments at the end of their financial years, in order to display spuriously high cash balances.

Another more nefarious example, is when a company borrows cash from an associate in order to disguise a short-term liquidity/cash flow problem.

These practices fall under the remit of the Financial Reporting Council (FRC).

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