What question did this study set out to answer?

The aim is to explore equity accounting methods for reciprocal stockholdings and evaluate their effectiveness.

March 18, 2026

Equity Accounting for Reciprocal Stockholdings.

MBMichael E. BradburyMassey University SCShirley CalderwoodUniversity of Auckland

Key Points

The aim is to explore equity accounting methods for reciprocal stockholdings and evaluate their effectiveness.
Review of alternative equity accounting treatments
Illustrative examples from New Zealand practices
Classification of treatments based on accounting theories
Multiple accounting treatments are identified and discussed
Illustrations reveal practical applications of different methods
Evaluation shows varying effectiveness based on theoretical frameworks

Abstract

Abstract This paper discusses the problem of equity accounting for reciprocal stock-holdings. Alternative accounting treatments are presented. Illustrations of some of these alternatives are discussed which are drawn from actual practice in New Zealand. The treatments are classified and evaluated according to two broad underlying theories of equity accounting.

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