Investments in Corporate Reports.

Abstract The article focuses on the presentation of the investments in corporate annual reports. There is lack of uniformity which makes it difficult for the reader to interpret the figures, descriptions are usually too limited, and the results of investment operations are almost always buried with other items on the income statements. As a result the reader is unable to judge the ability of management insofar as the investing of funds is concerned. All holdings in subsidiary companies are investments. With this interpretation the investment account would certainly be by far the most important item in many corporate reports. There are several logical reasons for avoiding this treatment and preferring the use of consolidated statements. But even after eliminating all controlled subsidiaries the investment account is still of major importance in most financial statements. Whether the amount involved is large or small, there is a fundamental reason why the investment account deserves special treatment.