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Accounting for joint ventures and associates in Canada, UK, and US: do US rules hide information?

By Kazbi Soonawalla


Unlike US GAAP, accounting principles in Canada and the UK require disclosure of disaggregated components of joint ventures and associates. Using comparative analysis of Canadian, UK and US data, this study investigates the potential loss of forecasting and valuation relevant information from aggregating joint venture and associate accounting amounts. Findings show that aggregating joint venture and associate investment numbers, and aggregating joint venture revenues and expenses, each leads to loss of forecasting and valuation relevant information. Thus, current US accounting principles likely mask information that financial statement users could use to predict future earnings and explain share prices

Topics: HF5601 Accounting
Year: 2006
DOI identifier: 10.1111/j.1468-5957.2006.00609.x
OAI identifier: oai:eprints.lse.ac.uk:3048
Provided by: LSE Research Online
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