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The Effect of Consolidated Statements on Loan Officers' Assessments of Ability to Repay

Author

Listed:
  • R. G. Walker

    (Professor of Accountancy, University of New South Wales.)

  • Trevor Wilkins

    (Senior Lecturer in Accountancy, National University of Singapore.)

  • Ian Zimmer

    (Lecturer in Accountancy, University of New South Wales.)

Abstract

The effect of consolidated statements on lenders' assessments of the capacity of members of groups of companies to repay term loans is investigated. Relevant accounting and banking literature is reviewed and a field experiment reported. Results indicate that the relevance of consolidated statements to this task is contingent on whether guarantees have been provided by a parent company, and the degree of default risk reflected by the applicant subsidiary's financial statements.

Suggested Citation

  • R. G. Walker & Trevor Wilkins & Ian Zimmer, 1982. "The Effect of Consolidated Statements on Loan Officers' Assessments of Ability to Repay," Australian Journal of Management, Australian School of Business, vol. 7(2), pages 179-195, December.
    • Handle: RePEc:sae:ausman:v:7:y:1982:i:2:p:179-195
    DOI: 10.1177/031289628200700206
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    References listed on IDEAS

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    1. Zimmer, I, 1980. "A Lens Study Of The Prediction Of Corporate Failure By Bank Loan Officers," Journal of Accounting Research, Wiley Blackwell, vol. 18(2), pages 629-636.
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    Cited by:

    1. R. G. Walker, 2003. "Objectives of Financial Reporting," Abacus, Accounting Foundation, University of Sydney, vol. 39(3), pages 340-355, October.
    2. Jim Psaros, 2007. "Do principles‐based accounting standards lead to biased financial reporting? An Australian experiment," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 47(3), pages 527-550, September.

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