Accounting for inter-corporate investments.

lnquiry is directed to the accounting treatment of inter-corporate shareholdings, with occasional reference to inter-corporate claims. It is accepted that the function of accounting is to provide information as a guide to future action in markets. Accounting concepts are adopted which it is believed may be employed to produce financial statements which perform this function. 80 that accounting procedures new be developed which will provide information of relevance where corporations hold shares in other corporations, attention is directed to the legal relationships which may arise on inter-corporate shareholdings. m3 examination is also relevant to specific issues in relation to the preparation of consolidated statements. Accounting writers occasionally refer to statutory and common law as support for the adoption of a concept of "economic entity" in relation to consolidated statements. Examination of legal relationships reveals that such assertions are unfounded. Further, accounting writers occasion.- ally suggest that the preparation of consolidated statements is a tribute to the inventiveness of accountants in foreshadowing future developments in law. However, it is suggested that future developments in English, Australian and American law may proceed in a different manner to that claimed