The first is an historical value based balance sheet where you record everything at what they cost you. For example lets say you bought real estate in 1920 for $1k and now its worth $1million. Historically you paid $1k and you can actually write that in, and you'd want to do that to show you "little" money your company makes, for things like taxes and such
The second case is a market value balance sheet where you record the market value of everything. If your company has inventory, you'd list its value at what it's worth, rather than what it cost you to make it. The interesting thing here is inventory is recorded as an asset. So at the end of the year if you have $50million of market value inventory sitting in a warehouse, a balance sheet will show how much money you MADE (even though you have not sold it). This is very good if you want to attract investors/loans and very bad for paying taxes ....
The point is both are legitimate and needed. The market value sheet will obviously produce a more accurate picture, but seeing as how inventory is an asset, there really is no "super accurate" picture, which is why it is important to keep accurate records for different scenarios.
I recommend an oldie but goodie: "Buy low, sell high, , collect early, pay late" - Dick Levin
edit: i realize I am not in disagreement with you, rather just want to highlight what I think for other HN that there is a need for different versions of the same thing, and its quite legal.
What if you prepay for a year of office space before the end of your fiscal year to show no profit in a year? Did you make a profit or not? These are different ways to interpret the same numbers.
Choosing how/when you depreciate certain assets, or if you use a FIFO or LIFO inventory process is all well and good. But you would still have 1 single set of accounting books/data.
I never enjoyed the accounting part of the companies I've started, but I've learned there are things you could do, things you should do and things that you shouldn't do. There is not a whole lot of room for interpretation, especially if you want to try to raise money or sell the company at any point.
You can create and present a document that shows your expectations and assumptions, but you can't say you made X amount of sales and Y amount of profit when the real numbers are different.
In reality though, the data you show and present should be realistic and perhaps slightly cautious. This is what you are going to be measured against. Being "incredibly optimistic" when you do not believe this to be true is really kind of fraudulent.
Set expectations for what can reasonably happen with the resources/constraints you are working with. Internally, manage your capital as if it were your last dollar. If you do not meet the expectations set, determine why.