What are Industry Practices?

Industry practices are those accounting issues that are unique to a specific industry, and which are used instead of normal accounting practices and reporting. For example, the financial statements of organizations will vary somewhat if they are in the gaming, insurance, medical care, or utility industries. These differences are allowed by the applicable accounting standards, as long as the departures from common practice are justifiable.

There are usually only a small number of unusual accounting practices associated with an industry. These practices are driven by the unique nature of an industry, such that following standard accounting practices would be cost-prohibitive and may also not result in financial statements that are the most representative of the operating results and financial position of a business.