Consolidated Balance Sheet Research Articles

Banking sector and economic growth in the digital transformation era: insights from maximum likelihood and Bayesian structural equation modeling

PurposeIn the digital era, the banking sector has transformed into a powerful intermediary, effectively connecting surplus and deficit units. This dynamic landscape empowers savers to secure their finances and generate returns, while simultaneously enabling businesses and individuals to access capital for investment and promoting economic growth. This study explores the relationships among banking development dimensions – represented by primary assets and liabilities, bank capital (core capital and required reserves) and economic growth as measured by components of gross domestic product (GDP).Design/methodology/approachThe study consolidated monthly balance sheets from digital banks over a 20-year period, resulting in an aggregate monthly balance sheet that reflects the financial position of all digital banks in the Palestinian economy. The research employs both maximum likelihood and Bayesian structural equation modeling to measure the causal pathways of the consolidated balance sheet with the individual components of GDP.FindingsThe results revealed that bank main assets (investments and loans) and liabilities (deposits) collectively explain for 97% of bank capital. Investments and loans demonstrate significant negative correlations with bank capital, while deposits exhibit a positive impact. This leads to a fundamental conclusion that a substantial proportion of retained earnings within the banking sector is reinvested, fueling expansion and growth. Additionally, the results showed a significant relationship between bank capital and various GDP components, including private consumption, gross investment and net exports (p = 0.000). However, while the relationship between bank capital and government spending was insignificant in the maximum likelihood estimation, Bayesian estimation revealed a slight yet positive impact of bank capital on government spending.Originality/valueThis research stands out due to its unique exploration of the intricate relationship between bank sector development dimensions, primary assets and liabilities and their impact on bank capital in the digital era. It offers fresh insights by dividing this connection into specific dimensions and constructs, utilizing a comprehensive two-decade dataset covering the digital banks records.

A study on financial performance of central bank of India

The banking industry plays a vital role in the economic development of a country which determines the money circulation among the people. The country's survival depends on the banking industry, which serves as the economy's foundation. Financial Performance is the only key tool which decides the operational efficiency along with sustainability of banking sector. The financial organization of branches and a different scope of monetary administrations, India's financial framework is enormous. The focus of this paper is to examine the financial performance of Central bank of India by using the analyzed ratios, for example, liquidity ratios, Solvency ratios, profit and loss ratios and balance sheet ratio are to be used for the assessment of financial performance of central bank of India with help of income and expenditures and consolidated balance sheet from the period of 2018 to 2022.

Window dressing in the banking sector of an emerging economy: evidence from aggregate data

PurposeThis study aims to investigate window dressing as practiced by commercial banks in Kuwait, using monthly aggregate balance sheet data covering the period January 1993 to December 2017.Design/methodology/approachThis study applies the structural time series model to decompose an observed time series into unobserved components based on monthly data covering January 1993 to December 2017 on the consolidated balance sheet of commercial banks in Kuwait.FindingsThe empirical results indicate that Kuwaiti commercial banks indulge in upward window dressing to boost size and liquidity. This kind of behaviour is indicated by a statistically significant rise in assets under the control of banks in December, followed by a statistically significant decline in January. The operation is funded by borrowing, leading to a December rise and a January fall in foreign and other liabilities, which are also under the control of commercial banks.Originality/valueThis study uses a novel methodology to detect window dressing based on the seasonal behaviour of balance sheet items. This study suggests a unified framework for the motives, targets, types and consequences of window dressing and how they are related.

Sudanese Banking Sector and Stress Testing

The repercussions of the 2008 Global Financial Crisis helped to reconsider the foundations used in assessing the banks’ withstand potential crises. In 2009, the BCBS issued a document entitled “Principles for Sound Stress Testing Practices and Supervision” as a basis for early evaluation of the performance of banking institutions and their ability to overcome sudden shocks and crises. The study aims to examine the ability of the Sudanese Banking Sector to pass stress testing and withstand sudden shock in light of the Basel II standards of stress test. The methodology was based on analyzing the performance of Sudan's economy, consolidated balance sheet, and financial soundness indicators of the banking sector (2005-2021). Additionally, it was based on a scenario designed for reverse stress testing (2022-2025). The results show that the Sudanese banking sector failed to bear sudden shocks and pass the stress testing due to its lack of commitment to applying the supervisory standards of Basel II. The war that broke out in the state of Khartoum on April 15, 2023, led to a deterioration in the political and economic conditions. It is expected to reduce the banking sector's power to absorb shocks. The paper recommends the Central Bank of Sudan follow up on the commitment of banks to apply the stress testing and financial soundness standards recommended by Basel II, especially capital adequacy, liquidity requirements, and political risk. Furthermore, the implementation of contractionary monetary policies serves to reduce inflationary pressures, which helps banks avoid credit and market risks.

Predicting Corporate Bankruptcy in JSE-AltX Listed Firms

ABSTRACT: The objective of the study is to predict corporate bankruptcy on the JSE-AltX (Alternative Stock Exchange) listed firms by employing Discriminant Analysis (MDA). Since its inception, the JSE-AltX has listed more than 100 firms and majority of them have migrated to the JSE main board. Motivated by the increasing number of delisted firms both pre and post their migration from JSE-AltX to the JSE main board, this study seeks to investigate the financial distress in the JSE-AltX listed firms. This study use a quantitative method to predict bankruptcy for a sample of 20 JSE-AltX listed firms that belongs to a wide range of industries, over the period from 1 January 2004 until 31 December 2015. Based on the previous literature it is evident that financial ratios play a significant role in the prediction of financial distress. Employing the same set of financial ratios (extracted from annual reports mainly the audited consolidated balance sheets and income statements) that are used in bankruptcy prediction as independent variables, the empirical results show that MDA has a statistically significant power in predicting default risk on the JSE-AltX listed firms. The findings show that the discrimination function is significant at the 5% level of significance. The MDA results reveal that, 7 out of the 20 sample firms are prone to bankruptcy, while the rest are not. Furthermore, the model classifies net profit margin (short-term profitability), current ratio (liquidity) and return on capital invested as the most important financial ratios in distinguishing the successful firms from unsuccessful firms post migration from the JSE-AltX to the JSE main board. Generally, this study results have policy implications which regulatory authorities, investors, employees and lenders will find interesting. Firstly, regulatory authorities can find this research useful as it provides effective review of the firm's financial distress conditions and subsequently signals default risk to various stakeholders. Secondly, this research will not only assist in identify potential default risks, but it will also enable different stakeholders to formulate mechanisms or relevant policies and procedures that will allow them to detect and prevent financial distress.

Pelatihan dan pendampingan manajemen keuangan dan laporan keuangan bumdes sempurna bangkalan

This community service aims to (1) provide an understanding of the importance of financial management and preparation of financial reports, (2) provide training and assistance in managing and preparing financial reports. This service was carried out at BUMDES Sempurna in Kamal village, Bangkalan Regency. Conducted for approximately 3 months, starting from October to December 2022. The methods used include: surveys, discussions and socialization on understanding financial management and financial reports, designing financial management and reports, making applications and conducting training on preparing financial reports based on MS Excel applications. The results of the training and mentoring showed that (1) before the mentoring, Bumdes Sempurna still did not know much about financial management and preparation, (2) After the mentoring, the BUMDES Sempurna management could understand the importance of financial management, there was already a separation of business unit managers, and already had a list of assets, (3) BUMDES was able to make and have financial reports based on MS Excel applications, including recording money in and out, profit and loss per business unit, profit and loss and consolidated balance sheet.

On the “double leverage” of US insurance groups

We show that a high degree of “double leverage” inside US insurance groups affects in a negative way their financial strength. Double leverage occurs when the parent firm finances the purchase of subsidiaries’ equity using external debt proceeds, i.e., without changing its stand-alone capital. The previous evidence shows that the double leverage of US Bank Holding Companies leads the firms to become riskier (Bressan, 2018b) and less efficient (Bressan et al., 2021). While regulators give instructions for the assessment of double leverage inside banking groups, in the insurance sector this topic has not received enough attention from either regulators or scholars. This article aims to fill this lack of knowledge by using data from the balance sheets of US insurance groups during the years 2000–2021, showing that indicators for the solvency and the performance of insurers decrease significantly in measures of double leverage. These findings deliver important implications for future policymaking. As we analyze accounting data from consolidated balance sheets, we argue that regulators should more carefully consider whether consolidation rules are sufficiently informative about the financial stability of insurance groups. This is an important task in relation to the systemic relevance of insurance corporations. Finally, this article is a starting point for follow-up research testing, for example, the link of double leverage to captive insurance (Weterings, 2014) and reinsurance (Park & Xie, 2014; Bressan, 2018a).

Have tax reduction and fee reduction promoted the development of the financial industry?—Empirical evidence based on listed companies in the financial industry

Finance plays an important role in China’s new development pattern, and the financial industry is also a crucial part of the country’s economic growth. This paper selects the four financial index data of 76 listed companies in the financial profile of Hithink RoyalFlush stocks and the consolidated balance sheet and consolidated income statement in the China Stock Market Accounting Research (CSMAR) database, empirically studies the impact of tax reduction and fee reduction on the financial industry through the Panel Vector Autoregression (PVAR) model, and gives relevant suggestions. The results show that: (1) The implementation of tax reduction and fee reduction policy makes the net profit available to the financial industry increase in the short term, but the long-term effect is not obvious. (2) The reduction of the tax burden will significantly increase the net sales interest rate of the financial industry within one year, and then the fluctuation in the impact tends to 0. (3) The reduction of the tax burden will lead to the reduction of financial enterprises’ sense of hardship in a certain period of time, which will lead to the reduction of the total asset turnover rate. (4) The reduction of the tax burden will increase the debt-to-asset ratio of financial enterprises within two years, thus increasing financial risk. The research not only provides a theoretical analysis and policy basis for the analysis of the impact of tax reduction on the financial industry but also provides decision support for tax reduction policies to revitalize industry development, stimulate financial market activities, ensure direct access to financial resources to enterprises, and further increase the market activities of the whole society.

Подход к оценке динамики изменения энергопотребления в регионе на основе использования нечеткой логики

Currently, energy efficiency indicators of regional infrastructure are presented as a rule in a quantitative form. However, decision makers need an assessment in a readable form to see the transition from a few quantitative values to a qualitative one that allows us in general to assess the dynamic patterns of energy consumption in the region. In this regard, the development of a method to assess the efficiency of energy consumption with linguistic recognition of the results obtained seems to be very relevant. The analysis is based on the retrospective values of indicators of the fuel and energy balances of the regions. The consolidated balance sheet includes about 500 indicator values for all used fuel and energy resources per year. To assess the multifactorial system under consideration, it is advisable to use the well-known matrix aggregation scheme, where the rows are the factors, and the columns are their qualitative levels. A standard five-level fuzzy 01-classifier is used as a scale for the transition from quantitative values of balance sheet indicators to qualitative values. A method is proposed to assess the dynamic pattern of energy consumption by means of linguistic recognition of a certain set of relative indicators of fuel and energy balances. Evaluation of the results in several regions using actual retrospective data has showed the relevance and reliability of the results obtained. At the same time, the results have been checked by methods of analysis and visualization of multidimensional data, as well as by experts. It has been established that the proposed approach to assess the efficiency of the use of fuel and energy resources can be used in the region policy of energy saving to improve the efficiency of decision-making.

The first attempt to uniform accounting in the USA: Individual and consolidated financial statements

Subject. This article examines the first attempts to unify accounting in the United States and analyzes the information needs of users of accounting information, which led to the emergence of consolidated financial statements. Objectives. The article aims to study the theoretical and methodological foundations of unification of US accounting in the context of individual and consolidated financial statements, as well as identify the theoretical and methodological foundations of consolidated financial statements as an independent type of financial reporting. Methods. For the study, I used combinations of analysis and synthesis, induction and deduction, and historical and logical research methods. Results. The article shows that the unification of accounting in the United States took place through the adoption of uniform rules, not through the recognition of generally accepted accounting principles. The first unified accounting rules were focused on meeting the information needs of banks and banking organizations as the main source of investment of commercial companies. Despite the existence of theoretical developments in the field of consolidated financial statements and the preparation of the first consolidated balance sheets in practice, preference was given to individual financial statements, which was due to the need to assess the creditworthiness of a potential borrower applying for bank financing. Relevance. The results obtained can be used in the development of the theory and methodology of consolidated accounting as an independent type of accounting of a group of companies.

A proposed Framework for Integrating XBRL and Blockchain to Improve Financial Reporting Transparency and Integrity: XBRL Chain

The research aims to use the blockchain technology to ensure the distribution of XBRL content to a decentralized peer- to-peer network while maintaining the authority of the government toward the whole data. The topic of combination XBRL and blockchain is scarcely discussed in academic journal due to the very early stage of technology development. This paper explains how to build a distributed ledger platform prototype that designed to improve financial reports transparency and integrity by using blockchain technology in line with XBRL to form XBRL chain. XBRL chain helps in developing smart contracts that more business rules encoded in software, why are as good as the person or team devising the rules and the developer turning those rules into code. These smart contracts with newest encoded accounting rules could effectively control the recording of accounting activities. Therefore, these contracts would provide automatic assurance on processes, such as posting, classification and cutoff. The proposed framework of XBRL chain makes the quality of information in the financial reporting more interoperability and comparability. This framework should subject to six situational conditions are: multi party, trusted authority, decentralization, smart contract, data confusability, and type of blockchain. A case study is implemented on Egyptian company (EDITA ) Food Company that publishes its financial statements under IFRS. The case explained how the integration between XBRL and blockchain can be built to implement XBRL mapping for consolidated balance sheet and profit or loss statement the mapping process is implemented under using black chain software. Also, the percentage of fit between IFRS taxonomy 2020 and Egyptian financial practices are measured. The findings of the case study revealed that, for EDITA Food Company, 89 percent of the elements in the two basic financial statements exist in the taxonomy. The high degree of misfit is found in the balance sheet statement 14 percent and in income statement is 6 percent limitations and future research directions are, this paper contributes to the literature by expending upon emerging concerns and providing opportunities for future research.

Preliminary impact of IFRS 9 implementation on the Lebanese banking sector

Research Question: What is the impact of the new requirements of the expected credit loss (ECL) model on the Lebanese banking sector? Motivation: In spite the expansion of research in respect of International Financial Reporting Standard N0. 9 (IFRS 9) in the past few years, it is still in its infancy in developing countries. Meanwhile, empirical IFRS 9 studies for banks is yet considered little as compared to the theoretical aspect. Our study seeks to fill this gap by testing the impact of IFRS 9 on the Lebanese banking sector. This paper is the first comprehensive attempt to empirically assess the estimated impact of IFRS 9 as disclosed in the 2017 financial statements. Idea: This study examines if the increase in provision based on the new ECL is strongly positively related to the average credit losses for the last 5 years, the current provisions level for the loans portfolio, the portfolio of investment securities, and the portfolio of liquid assets. Data: The data were collected from 19 consolidated banks representing 91% of the total consolidated balance sheet of all Lebanese banks. Tools: To test study’s hypotheses, we applied linear regression using SPSS. Findings: Two main results can be derived: First, we found that the impact of the new ECL model is not material to the banks’ equity if we consider the excess regulatory provisions booked in anticipation of IFRS 9. Second, we found that the increase in provision based on the ECL model is strongly positively related to the portfolio of investments securities and negatively related to the historical credit loss ratio. Contribution: Empirical IFRS 9 studies for banks is yet considered little as compared to the theoretical aspect. Our study seeks to fill this gap by testing the impact of IFRS 9 on the Lebanese banking sector. The Lebanese banks are an interesting case because they play a key role in the Lebanese economy, acting as the main channel for capital inflows into the country and financing the largest part of the government’s current account deficit.

How to Value Private Companies using Multiples and Discounted Cash Flow Analysis

In this paper we outline how to value private companies and work through a real case study. The corporate finance and valuation techniques on display can be used to value any private company or project that is illiquid with little or no market data. Together with this paper we provide the full background information for the case study, including consolidated balance sheet, cash flow and income statements and an Excel workbook with a full valuation breakdown . Two valuation approaches are presented. The first approach is called ‘multiples’ and requires we first identify sensible comparable companies with public data and can serve as a reasonable proxy for our underlying firm or project. Known proxy enterprise values are converted into multiples of EBITDA and extrapolated to value the private company or project of interest. Enterprise value can be measured as a multiple of sales, earnings, EBITDA, EBIAT and many income factors. Typically practitioners measure enterprise value as a multiple of EBITDA to exclude sales margin, capital structure, debt and leverage and other idiosyncratic biases. The second valuation method takes a discounted cash flow (DCF) approach. This approach is forward looking; it projects and values the future cash flows of a company. This method lends itself to richer analysis compared to the multiples approach, but relies heavily on assumptions surrounding cash flow projections, growth rates and the weighted average cost of capital (WACC). The WACC acts as a yield or discount factor and is required to value the cash flows of the firm or project (Burgess, 2020). Finally we compare the prices from several different approaches to arrive at a suitable price range. It is important to note that all approaches involve assumptions and approximations of some kind. Therefore practitioners seek to establish a reasonable price range rather than a single price. Transactions however must take place at a single price and law suits are a popular commonplace negation tactic to squeeze for additional value.

Legal Aspects of the Single Monetary Policy in the Euro Area: From the Establishment of the Eurosystem to the Current Pandemic Crisis

The present University notes contain a brief presentation and analysis of the legal framework governing the single monetary policy in the euro area, as this developed from the establishment of the Eurosystem until today. It is structured in four Sections: Section A deals with the definition of the single monetary policy in the Eurosystem after a brief presentation of the notions of monetary system and (conventional and unconventional) monetary policy. Particular emphasis is given to the definition of price stability in the euro area. The legal framework governing the implementation of the single monetary policy is discussed in Section B. In this respect, the instruments for the implementation of monetary policy (i.e., open market operations, standing facilities and minimum reserves), the eligible counterparties and the assets eligible as collateral in the Eurosystem are discussed in turn. The focus in Section C is on the implementation of the single monetary policy following the recent (2007-2009) global financial crisis (GFC) and the subsequent fiscal crisis in the euro area, discussing in detail the ECB asset purchase programmes (APPs) and the programme for targeted longer-term refinancing operations (TLTROs). Section D reviews then the developments relating to the implementation of the single monetary policy since the outbreak of the current pandemic crisis, discussing, inter alia, the pandemic emergency longer-term refinancing operations (PELTROs), the Pandemic Emergency Purchase Programme (PEPP) and the amendments introduced to other APPs. Finally, the Excursus at the end of the notes briefly presents the newly introduced euro short-term rate (€STR). It is noted that Tables 5 and 6 present (respectively) the evolution of the Eurosystem’s consolidated balance sheet during the period 2007-2017, to highlight the impact of the measures taken after the 2007-2009 GFC and the subsequent euro area fiscal crisis, as well as during the period December 2019 – March 2021 to show the impact of the measures taken amidst the pandemic crisis.

A Comprehensive Approach to the Capital Requirements Based on EVA

We propose a holistic approach to balance sheet management to show how banks can meet both regulatory capital (proposed under Basel III) and shareholders’ wealth simultaneously. Using the consolidated balance sheet, this work outlines a methodology for mapping between targeted credit risks based capital ratio and economic value added by which banks can predict their optimal balance sheet. The results of this study are as follows. First, using an ex-ante approach, we predict the optimized balance sheet in each year from the previous year's data. By imposing the restriction of a maximum of 5% possible changes in the balance sheet items compared to the real changes, we could make an optimized balance sheet in which we predict more EVA with the same capital ratio compared to the real performance in each year. Second, in the ex-post approach, we use the optimized balance sheet items predicted by the ex-ante approach and assume that if this optimized balance sheet is used by the bank in practice, how much more EVA will be gained. The results show that in this approach (the ex-post approach), we could generate more EVA. It means that if the bank had used this optimized balance sheet in practice, it could have made more EVA. Robustness tests also support our main results when we impose more restrictions on the analysis.

MONITORING OF EXCHANGE RISK OF BANKS BASED ON THE CONSOLIDATED BALANCE SHEET INDEX

The paper deals with basic approaches to monitoring of the currency risk. The purpose of the paper is to substantiate the theoretical and methodological foundations of the complex application of risk assessment methods to prevent the adoption of its excessive level, as well as instruments for monitoring the profitability of operations in the foreign exchange market, based on the calculation of the consolidated balanced index.
 It was determined that in the context of the volatility of the national currency the exposure of banks to currency risk increases significantly, it means that is, the magnitude of the consequences of its manifestation for most financial intermediaries increases. The authors of the paper consider the system of currency risk management as a set of goals, principles, functions, methods, tools and specific techniques of purposeful, continuous influence of the management system on the managed one for timely estimation and monitoring of currency risk in order to minimize it and achieve specified parameters of currency yields.
 In according to current management standards, implemented by leading financial institutions and international regulators, currency risk monitoring mechanisms must not only timely and effectively identify deviations from key risk targets, but also provide for the ability to identify unforeseen situations.
 It was proved that that the monitoring tools, policies and procedures have to meet a number of criteria, which are taken into account at the achievement of the main goals of the bank and increase its resistance to external shocks on the foreign exchange market. Taking into account the fact that the value of currency risk by the ES metric is included in the calculation of the consolidated balanced index, the change in the regulatory regimes is made on the basis of the projected deviations of the CEI from the target corridor, recorded at the initial stage in determining the level of risk exposure of the bank. Thus, the proposed balanced approach to forecasting involves the use, on the one hand, of statistically reliable quantitative analysis tools and, on the other hand, qualitative environmental change signals that aggregate the benefits of structural methods, while providing the flexibility and timeliness of managerial decision-making. 
 The specification of currency risk management regimes should be tailored to the specific features of a particular bank and have a combinatorial nature that involves the integration of individual impulses by analysis tools, forecasting, time horizons and levels of management, as well as in terms of components of the CEI consolidated balance sheet and risk level of activity in the foreign exchange market. This approach allows for the flexibility of management systems and their adaptability to the external conditions of the bank, and the use of quality monitoring signals increases the speed of decision-making and elimination of deficiencies that can be inherent in econometric assessment tools.

Incremental Usefulness of the Parent-only Balance Sheet to Debt Holders: Evidence from Banks

Debt contracts are signed by specific legal entities. However, general-purpose financial statements prepared under U.S. GAAP and Canadian GAAP are for a consolidated reporting entity—a collection of legal entities that include the parent and any subsidiaries it controls. This reporting model results in a loss of crucial information about the individual legal entities within the consolidated reporting entity. Our study uses bank holding companies, which report both consolidated and parent-only financial statements under bank regulations, to examine whether the parent-only balance sheet provides useful information for pricing the parent’s default risk beyond the consolidated balance sheet. We find robust evidence that after controlling for the consolidated leverage ratio, the parent-only leverage ratio is positively associated with the price of protection against the parent’s default risk. The incremental usefulness of parent-only leverage is more pronounced when the parent does not guarantee the subsidiaries’ debt and when the internal capital market within the consolidated reporting entity is weak. Our findings suggest that supplementing consolidated financial statements with parent-only financial statements may better serve debt holders’ information needs.

ANALYSIS OF ECONOMIC ACTIVITY OF A MACHINE-BUILDING ENTERPRISE FOR FURTHER INTERNALIZATION OF NEGATIVE EXTERNALITIES IN SUSTAINABLE DEVELOPMENT

Modern and current works and research on the subject of externalities are analysed. The problems of research of externalities by numerical analysis are determined. Some articles of the consolidated balance sheet and consolidated report on the financial results of the enterprise on the separation of externalities of economic activity of the machine-building enterprise are considered. For each balance sheet item and consolidated report, economic, social and environmental externalities are identified in accordance with the principles of sustainable development of the machine-building enterprise. Each item of the balance sheet and consolidated report is also considered by the nature of the impact of externalities, that is indicating negative and positive externalities. There are three groups of indicators of economic externalities. The coefficient of a separate item of expenditure, reflecting externalities, depending on the total amount of the balance sheet is determined. In order to calculate the effect of a separate external to net profit (loss), the weight estimate of each external is determined depending on the nature of the impact on the economic activity of the machine-building enterprise. To determine the impact of externalities on net profit (or loss) for each year, the sum of the coefficients depending on the total weight estimate was studied separately. The ratio of the change in the sum of the coefficients of externalities in comparison with the profit or loss of the machine-building enterprise is determined, and also the influence of externalities on the net profit is taken into account. The moments of transition of positive externalities to negative and on the contrary in relation to receiving profit or the task of loss are specified. The average value of the sum of the coefficients of externalities as a percentage of the balance sheet is given. Thus, the influence of the dependence of negative externalities on the final profit of the machine-building enterprise is determined. The need for further internalization of negative externalities for the development of social welfare and positive impact on the environment is identified.

Procjena nekonvencionalnih mjera Evropske Centralne Banke - rekurzivni VAR pristup

Unconventional monetary measures utilization has proven to be of great importance in maintaining monetary and economic stability after the Great Recession. However, we aim to test this conclusion through the impact of the quantitative easing implemented by the European Central Bank. Observed through generated shocks in the balance sheet of the Eurosystem as our main variable, we tested whether quantitative easing reestablished economic growth and rose price levels, mainly through lowering borrowing costs for banks, thus helping in the post-crisis recovery. To prove our hypotheses we construct a recursive VAR model estimated in levels using 2014M05-2018M12 data. The model incorporates variables such as the industrial production and the HICP, as output and price level proxies, and financial components such as the EONIA-MRO spread and the CISS index. The results show that the expansion shocks of the consolidated balance sheet have a positive temporary influence on industrial production and the HICP, but the reaction of the former seems to be 2.24 times greater. On the other hand, we find out that quantitative easing has an expected negative impact in widening the EONIA-MRO spread. Furthermore, we could not confirm the theoretically expected accommodative impact on financial stress.

New development: Importance of accounts receivable in Colombian state entities and their impact on the preparation of financial information

ABSTRACT The article shows the importance of accounts receivable in the financial structure of state entities (purely government entities and state companies), and the challenge of standardizing accounting policies in order to prepare a national consolidated balance sheet. The focus is on Colombia. The research is qualitative, based on an analytical link between the nature of state entities, liquidity management and measurement in the preparation of financial information. Evidence is provided about the opportunities and limitations of the accounting regulation frameworks established for the public sector in Colombia. The author identifies future fields of research on public sector accounting and its role in accountability.