Economic determinants of firms' choice to equity account associated companies

Mazay, Veronique. (1986). Economic determinants of firms' choice to equity account associated companies Honours Thesis, School of Business, The University of Queensland.

       
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Author Mazay, Veronique.
Thesis Title Economic determinants of firms' choice to equity account associated companies
School, Centre or Institute School of Business
Institution The University of Queensland
Publication date 1986
Thesis type Honours Thesis
Total pages 92
Language eng
Subjects 14 Economics
Formatted abstract This study attempts to explain the observed disparity in the accounting treatment of long-term intercorporate investments in associated companies by Australian firms. Based on the economic agency theory, it is hypothesized that management's decision to adopt the accounting method recommended by AASl4 “Equity Method of Accounting" or some other alternative is related to the (1) reported profit of the associated company, (2) political sensitivity of the investor, (3) borrowing restrictions of debt covenants, and (4) dividends declared by the associate. In addition, the effects of "choice" of accounting method, as well as disclosure, are investigated. Evidence consistent with the hypotheses is provided.

 
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Created: Thu, 28 Oct 2010, 10:25:31 EST by Ning Jing on behalf of The University of Queensland Library