The impact and valuation of off-balance-sheet activities concealed by equity method accounting.

SYNOPSIS: This paper reports the follows of a study of the financial reporting issues of off-balance-sheet activities concealed by the agency of the equity method of accounting. The close attention examines footnote disclosures relating to equity means investees, offers suggestions for improving the usefulness of those disclosures, and estimates the valuation issues of information in the disclosures. An important empirical finding is that the market places significant negative values upon investor-guaranteed off-balance-sheet obligations.

INTRODUCTION

Financial analysts have drawn out been concerned with the result of off-balance-sheet activities on a firm's financial condition. The financial statement analysis literature emphasizes the importance