Linked balance sheet presentation

Lisa Koonce, Zheng Leitter and Brian J. White

Journal of Accounting and Economics, 2019, vol. 68, issue 1

Abstract: Certain financial statement items are closely related, such as items in hedging relationships. In this paper, we develop theory and conduct two experiments to investigate three different balance sheet presentation formats for related financial statement items. We posit that a linked presentation format rarely used in practice allows financial statement users to better distinguish among firms with different economics. Neither net presentation nor separate presentation of related balance sheet items allows users to make this distinction. The results of two experiments—one in a hedging context and the other in a lending context—support our theory-based predictions.

Keywords: Financial statements; Linked presentation; Causal reasoning (search for similar items in EconPapers)
JEL-codes: D81 M41 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jaecon:v:68:y:2019:i:1:s0165410119300321

DOI: 10.1016/j.jacceco.2019.101237

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