The term industry practices constraint refers to an accounting constraint that states the preparation of financial statements for some industries require a departure from what would be considered standard accounting practices.
Constraints accounting is a financial reporting approach that is consistent with the framework outlined by the Financial Accounting Standards Board (FASB). In addition to industry practices, such constraints include cost / benefit along with materiality.
The constraint of Industry Practices means some industries will report information on a financial statement in a way that departs from generally accepted formats. The most often cited examples of this constraint apply to the utility, agricultural, and financial services sectors.
Since electric, gas and many other utilities are capital intensive industries, the first line item appearing on their balance sheets are non-current assets (utility plant). Individual crops are usually reported at market value in the agricultural industry. The treatment of securities held by financial services companies will differ from that of a company in the software or other industries.