An empirical study of the value-relevance of using proportionate consolidation accounting for investments in joint ventures

Ronald L. Stoltzfus and Ruth W. Epps

Accounting Forum, 2005, vol. 29, issue 2, 169-190

Abstract: This research examines bond risk premiums to determine whether creditors of companies with investments in joint ventures reflect legal or implicit measures of the debts of joint ventures. The legal view suggests that the amount of potential loss from an investment in a joint venture is limited to the investment. The implicit view suggests that the operations of the joint venture and the venturer are interdependent. Equity method accounting reflects the legal view and proportionate consolidation reflects the implicit view.

Date: 2005
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:accfor:v:29:y:2005:i:2:p:169-190

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DOI: 10.1016/j.accfor.2004.10.001

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