Window-dressing in German inter-war balance sheets
AbstractGerman accounting rules value assets and liabilities asymmetrically and thus lead to grossly distorted balance sheets. In the inter-war debate on a reform of disclosure regulation, financial experts considered the (undisclosed) tax balance sheet, which had to be drawn up separately for the corporate tax assessment, as a paradigm for adequate financial disclosure. However, due to tax secrecy they were barred from analysing tax documents. Using archival evidence, we analyse tax balance sheets as a means of assessing the reliability of disclosed balance sheets of the inter-war period. It emerges that companies overstated their profits in the mid- and late-1920s, but grossly understated them in the Nazi economy.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal Accounting History Review.
Volume (Year): 8 (1998)
Issue (Month): 3 ()
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- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
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CEPR Discussion Papers
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