An Empirical Study of Net Assets Disclosure: Inflation Accounting Revisited

20 Pages Posted: 2 Nov 2005

See all articles by David C. Yang

David C. Yang

University of Hawaii - School of Accountancy

Miklos A. Vasarhelyi

Rutgers Business School

Caixing Liu

California State University, Sacramento - College of Business Administration

Kim Shima

University of Hawaii - Shidler College of Business

Abstract

This paper analyzes the differences in methods of calculating and disclosing net assets between Statement of Financial Accounting Standards #33 (FAS33) and other existing current cost and constant dollar methods. Furthermore, this paper provides empirical evidence on the methods employed by a sample of 78 companies that calculate net assets for FAS33 reporting. We found there are many methods being applied to determine net assets. The lack of uniformity reduces the effectiveness of net assets disclosure required by FAS33. This study demonstrates that the Financial Accounting Standards Board should issue statements that are more well-defined and less ambiguous about preferred net asset disclosure methods.

Keywords: Owner's equity, Net assets, FAS 33, Constant dollar method, Current cost method

JEL Classification: M41

Suggested Citation

Yang, David C. and Vasarhelyi, Miklos A. and Liu, Caixing and Shima, Kim, An Empirical Study of Net Assets Disclosure: Inflation Accounting Revisited. International Journal of Business, Vol. 10, No. 4, 2005. Available at SSRN: https://ssrn.com/abstract=830084

David C. Yang (Contact Author)

University of Hawaii - School of Accountancy ( email )

College of Business Administration
Honolulu, HI 96822
United States

Miklos A. Vasarhelyi

Rutgers Business School ( email )

180 University Avenue
Ackerson Hall, Room 315
Newark, NJ 07102
United States
973-353-5002 (Phone)
973-353-1283 (Fax)

Caixing Liu

California State University, Sacramento - College of Business Administration ( email )

School of Business Administration
Sacramento, CA 95819-6081

Kim Shima

University of Hawaii - Shidler College of Business ( email )

2404 Maile Way
Honolulu, HI 96822
United States

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