Incentives for unconsolidated financial reporting

Incentives for unconsolidated financial reporting

We provide a positive analysis of a firm's decision to report the operations of a financial subsidiary on a consolidated versus an unconsolidated basis. Our evidence indicates that the firm is more likely to choose consolidated reporting the greater the operating, financial, and informational i...

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Veröffentlicht in:Journal of accounting & economics 1990, Vol.12 (1), p.141-171
Hauptverfasser: Mian, Shehzad L., Smith, Clifford W.
Format: Artikel
Sprache:eng
Schlagworte:
Accounting
Accounting policies
Accounting procedures
Accounting theory
Choices
Consolidated financial statements
FASB statements
Financial reporting
Incentives
Parent companies
Statistical analysis
Studies
Subsidiaries
Unconsolidated subsidiaries
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Zusammenfassung:We provide a positive analysis of a firm's decision to report the operations of a financial subsidiary on a consolidated versus an unconsolidated basis. Our evidence indicates that the firm is more likely to choose consolidated reporting the greater the operating, financial, and informational interdependencies between parent and subsidiary. Moreover, our evidence offers no support for the FASB hypothesis that firms use unconsolidated financial subsidíaries to understate the fixed claims on their balance sheets.
ISSN:0165-4101
1879-1980
DOI:10.1016/0165-4101(90)90045-6