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What Does the Balance Sheet (Not) Show? Asset Valuation in the Hungarian Accounting System

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  • M. Horváth, Gábor

Abstract

In interpreting corporate financial statements, the balance sheet total is often treated as a direct measure of a firm’s wealth. However, continental accounting systems, including Hungarian accounting regulation, are grounded primarily in accrual accounting, realization, and capital protection. This study examines which firm-level factors are associated with the use of asset revaluation in the Hungarian corporate sector. The empirical analysis is based on the CrefoPort database for 2020-2024 and comprises 811,998 firm-year observations for 164,712 companies. The relationships are analyzed using a logistic regression model. The results show that revaluation is associated mainly with asset structure and firm size, while a significant relationship is also observed with the firm’s capital protection position. The analysis provides large-sample empirical evidence that, in the Hungarian accounting environment, asset revaluation does not function as a general technique for approximating corporate wealth.

Suggested Citation

  • M. Horváth, Gábor, 2026. "What Does the Balance Sheet (Not) Show? Asset Valuation in the Hungarian Accounting System," Public Finance Quarterly, Corvinus University of Budapest, vol. 72(2), pages 112-125.
    • Handle: RePEc:pfq:journl:v:72:y:2026:i:2:p:112-125
    DOI: https://doi.org/10.35551/PFQ_2026_2_5
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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • M48 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Government Policy and Regulation

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