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

R. G. Walker, Trevor Wilkins and Ian Zimmer
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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.

Australian Journal of Management, 1982, vol. 7, issue 2, 179-195

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.

Keywords: ABILITY TO REPAY; AREA OF CONSOLIDATION; CONSOLIDATED STATEMENTS; GUARANTEES; LOAN OFFICER JUDGMENTS (search for similar items in EconPapers)
Date: 1982
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:ausman:v:7:y:1982:i:2:p:179-195

DOI: 10.1177/031289628200700206

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