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Window-dressing in German interwar balance sheets


  • Mark Spoerer


German 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.

Suggested Citation

  • Mark Spoerer, 1998. "Window-dressing in German interwar balance sheets," Economics Working Papers 305, Department of Economics and Business, Universitat Pompeu Fabra.
  • Handle: RePEc:upf:upfgen:305

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    References listed on IDEAS

    1. George J. Benston, 1994. "Universal Banking," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 121-143, Summer.
    2. Jeremy Edwards & Sheilagh Ogilvie, 1996. "Universal banks and German industrialization: a reappraisal," Economic History Review, Economic History Society, vol. 49(3), pages 427-446, August.
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    Cited by:

    1. Malcolm Anderson, 1999. "Accounting History Publications 1998," Accounting History Review, Taylor & Francis Journals, vol. 9(3), pages 375-384.
    2. Luis Fernandez-Revuelta & Donato Gomez & Keith Robson, 2002. "Fuerzas Motrices del Valle de Lecrin, 1936-9: accounting reports and ideological struggles in time of civil war," Accounting History Review, Taylor & Francis Journals, vol. 12(2), pages 347-368.

    More about this item


    Germany; accounting history; window-dressing; tax balance sheet;

    JEL classification:

    • N24 - Economic History - - Financial Markets and Institutions - - - Europe: 1913-


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