Window-dressing in German interwar balance sheets
AbstractGerman accounting rules value assets and liabilities asymmetrically and thus lead to grossly distorted balance sheets. In the interwar 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 thay were barred from analyzing tax documents. Using archival evidence, we analyze tax balance sheets from which the reliability of disclosed balance sheets of the interwar period can be assessed. It emerges that companies overstated their profits in the middand late 1920s, but grossly understated them in the Nazi economy.
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Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 305.
Date of creation: Jul 1998
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Web page: http://www.econ.upf.edu/
Germany; accounting history; window-dressing; tax balance sheet;
Other versions of this item:
- Mark Spoerer, 1998. "Window-dressing in German inter-war balance sheets," Accounting, Business and Financial History, Taylor and Francis Journals, vol. 8(3), pages 351-369.
- N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-
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- Edwards, Jeremy & Ogilvie, Sheilagh C., 1995. "Universal Banks and German Industrialization: A Reappraisal," CEPR Discussion Papers 1171, C.E.P.R. Discussion Papers.
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