He says that Japanese managers tend to be extremely conservative with their accounting--particularly with depreciation and amortization of goodwill--and this makes some companies appear to be expensive on a price-to-earnings basis.

FORBES: Cash For Sale

That makes sense: Accounting rules require REITs to subtract depreciation in arriving at net income, but real estate tends to appreciate in value, not depreciate.

FORBES: Shaky Dividends

For example, one accounting concept that distorts financial realities is the principle of depreciation.

FORBES: The P/E Problem