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- Title
An Evaluation of the Information Conveyed by Consolidated Statements.
- Authors
Walker, R. G.
- Abstract
The article presents information on the anomalies and inconsistencies in the theory and practice of preparing consolidated reports. Consolidated statements were initially used in different ways in different countries. In the U.S., consolidated statements were used from the early 1900s as substitutes for parent-company reports. On the other hand, consolidated statements were introduced in Great Britain in the 1920s, at a time when British companies legislation effectively required the presentation of the balance sheets of individual firms. In this context, consolidated reports were regarded as a convenient way to supplement conventional balance sheets. By the 1930s and 1940s, consolidated statements were regarded as the customary vehicle for communicating financial information to the securities market. Consolidated statements depict the financial position and performance, and amplify the financial statements of holding companies. It supplements the balance sheets of holding companies or subsidiaries, facilitating assessments of the ability of those firms to meet their debts. It also supplements the financial statements of holding companies by depicting the position and performance of "economic entities."
- Subjects
CONSOLIDATED financial statements; FINANCIAL statements; HOLDING company accounting; FINANCIAL markets; CORPORATE debt; ACCOUNTING
- Publication
Abacus, 1976, Vol 12, Issue 2, p77
- ISSN
0001-3072
- Publication type
Article
- DOI
10.1111/j.1467-6281.1976.tb00288.x