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The growing need for more relevant detail in financial statements proper to be produced annually, quarterly or monthly, and possibly continuously, translates into an urgent need for more advanced methods and tools for trend analysis. This paper takes a broader view at balance sheet analysis. We observe balance sheet items at the highest level of aggregation and compare them with the next level of detail. This exposes a multidimensional structure produced by all balance sheet items and their time points. This innovative approach to balance sheet analysis provides a new method to determine the relevance and materiality of accounting information. Instead of computing accounting ratios separately, we apply multivariate analysis as to explore the “data space” of the balance sheet of our example company: 3M. We study ten‐years of quarterly balance sheets and discuss some trends by comparing scatter plots with spectral map analysis – spectramap for short – and color coding to expose latent variables hidden in this data. We substantiate that we can explain the larger part of variance present in balance sheets in a more meaningful manner. This paper also seeks to corroborate the generality assumption that underlies the structure of the balance sheet. We strive to increase the usability of balance sheet data and underpin its explanatory power.

If we cannot explain goodwill and potential goodwill in asset terms, they do not make sense. A partial explanation can be found in human assets or employee artefacts. A balance sheet model including employee artefacts is illustrated, and the consequences on the balance sheet and related financial key ratios are substantial. The inclusion of employee artefacts on the balance sheet (1) seems to make sense, (2) but it is still unclear if the inclusion will make organizations “better.” Even though the development of the balance sheet model is done in accordance with generally accepted accounting principles, it seems to (3) challenge the (elite) social order in organizations.

1.1 What Are Accounts For? Overview The purpose of accounts is to reveal performance in the conduct of a business or other activity concerned with use of economic resources (e.g. a club). It is thus a matter of stewardship. Although, like economics, it is necessary in accounting to use money as a measure of performance, it is concerned with the individual organisation rather than with economic phenomena as a whole.

Sees the objective of teaching financial management to be to help managers and potential managers to make sensible investment and financing decisions. Acknowledges that financial theory teaches that investment and financing decisions should be based on cash flow and risk. Provides information on payback period; return on capital employed, earnings per share effect, working capital, profit planning, standard costing, financial statement planning and ratio analysis. Seeks to combine the practical rules of thumb of the traditionalists with the ideas of the financial theorists to form a balanced approach to practical financial management for MBA students, financial managers and undergraduates.

This paper aims to investigate the links between accounting values in Chinese listed companies’ balance sheets and the exposure of their fraudulent activities.

Every balance sheet account is proposed to be a potential vehicle to manipulate financial statements.

Other receivables, inventories, prepaid expenses, employee benefits payables and long-term payables are important indicators of fraudulent financial statements. These results confirm that asset account manipulation is frequently carried out and cast doubt on earlier conclusions by researchers that inflation of liabilities is the most common source of financial statement manipulation.

Previous practices of solely scaling balance sheet values by assets are revealed to produce spurious relationships, while scaling by both assets and sales effectively detects fraudulent financial statements and provides a useful fraud prediction tool for Chinese auditors, regulators and investors.

The purpose of this paper is to use some of the contributions of the option pricing theory to solve three outstanding puzzles in finance: the underdiversification puzzle, the volatility puzzle and the equity premium puzzle.

To approach the issue, this paper considers the applications of the option pricing theory to both sides of the corporate balance sheet. Applications to the left-hand side of the balance sheet has led to the real options theory that has expressed the value of a capital budgeting project as the sum of the values of its “discounted cash flow (DCF) method” and “real options.” This paper argues that, because the balance sheet must balance, the value of equity, which appears on the right-hand side of the balance sheet, should also be expressed as the sum of the values of its “DCF method” and “equity options.”

This proposed model of equity valuation solves the three outstanding puzzles in finance: the underdiversification puzzle, the volatility puzzle and the equity premium puzzle.

This study may not be able to explain the full extent of the three puzzles.

The dividend discount model of equity valuation needs to be augmented by an option component.

The community of finance scholars will become more confident of their scholarly work because three puzzles will be solved to a great extent.

To the best of author’s knowledge, the extant literature does not either solve any single one of the three puzzles through the contributions of option pricing theory or solve all three puzzles at the same time with a single solution. The originality of this paper is that it makes both of these contributions to the extant literature.

An enterprise may appoint a specialist to assume responsibility for financial management, but his achievements will be constrained to the extent that other functional managers, at all levels, fail to see, as a complement to their particular specialism, their own responsibilities as finance managers. The same point may be made of personnel management.

For many corporate occupiers, commercial property constitutes one of their largest operational assets. With a desire to improve shareholder value and efficiency and to refocus on core business, the continued necessity to retain such assets on the balance sheet is now under challenge. Changes in accountancy practice and a desire to maintain flexibility are, however making the choices ever more complicated. This paper examines the current options available for corporate users seeking to extract value from their property assets.

Studies the relative focus on the balance sheet and income statement in the Journal of Accountancy and The Accounting Review during the period, 1926‐1936. An index number representing the relative focus for each year for each journal was obtained from a content analysis of a sample of pages from the journals. Four hypotheses derived from accounting literature were tested, none of which can be accepted. In general, the focus on the income statement occurred earlier than expected and the combined time series for both journals was U‐shaped over the period. Offers three explanations for the behaviour of the time series: the hypotheses are based on several sources, each source potentially having a unique time‐series; second, the impact of significant increases in federal income tax rates on the content of accounting literature has been underestimated; and third, authors in the two journals, particularly the Journal of Accountancy, reacted very quickly to perceived problems and opportunities.