Paper #305

Título:

Window-dressing in German interwar balance sheets

Autor:

Mark Spoerer

Data:

Julio 1998

Resumen:

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.

Palabras clave:

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

Códigos JEL:

N24

Área de investigación:

Finanzas y Contabilidad

Publicado en:

Accounting, Business & Financial History, volume 8, number 3, 351-369, November 1998

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