Abstract

In this paper, we embed the double entry accounting structure in a simple belief revision (estimation) problem. We ask the following question: Presented with a set of financial statements (and priors), what is the reader's "best guess" of the underlying transactions that generated these statements? Two properties of accounting information facilitate a particularly simple closed form solution to this estimation problem. First, accounting information is the outcome of a linear aggregation process. Second, the aggregation rule is double entry.

View research

Citation

Arya, A., J. Fellingham, Jonathan Glover, D. Schroeder, and Gilbert Strang. "Inferring Transactions from Financial Statements." Contemporary Accounting Research 17, no. 3 (2000): 366-385.

Each author name for a Columbia Business School faculty member is linked to a faculty research page, which lists additional publications by that faculty member.

Each topic is linked to an index of publications on that topic.