Question
The market value (or market cap) of a company typically does not equal the book value of its owners equity as found on the balance
The market value (or market cap) of a company typically does not equal the book value of its owners equity as found on the balance sheet. This suggests that there are errors in the recorded balance sheet.
a. Explain why this situation occurs.
b. Even if the balance sheet has errors, what implication does this have for the income statement?
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Financial Accounting Theory
Authors: Craig Deegan, H. Bierman
4th Edition
0071013148, 978-0071013147
