Unemotional balance sheets;

              ATLANTA
BALTIMORE
BOSTON
BUFFALO
CHICAGO
CINCINNATI
CLEVELAND
DALLAS
DENVER
DETROIT
KANSAS CITY
LOS ANGELES
MINNEAPOLIS
NEWARK
NEW ORLEANS
HASKINS & SELLS
CERTIFIED PUBLIC ACCOUNTANTS
BULLETIN E X E C U T I V E OFFICES
HASKINS & SELLS BUILDING
37 WEST 39TH ST., NEW YORK
NEW YORK
PHILADELPHIA
PITTSBURGH
PORTLAND
SAINT LOUIS
SALT LAKE CITY
SAN FRANCISCO
SEATTLE
TULSA
WATERTOWN
HAVANA
LONDON
PARIS
SHANGHAI
VOL. VI NEW YORK, JUNE, 1923 No. 6
Unemotional Balance Sheets
" R E A D ' E M and weep" may apply as
well to some balance sheets as to the
"galloping dominoes" which play such an
important part in the recreation of a cer­tain
leisure class of dusky hue.
Consider the poor unfortunate who has
taken his savings to buy stock of some new
corporation and looks on his purchase as
an investment. Statements from time to
time are favorable—on their face. Divi­dends
are not immediately forthcoming,
but then any new concern requires time in
which to get started. Sweet phrases about
good intentions keep things going for a
while. Then comes the crash. Obviously
the statements must have been "window
dressed," if they were not positively un­truthful.
The line of demarcation between state­ments
which are made misleading and those
which are untruthful is difficult to fix.
Who can say that participating contracts
may not be wholly warranted as an asset in
the balance sheet of a motor car company?
It is conceivable that they might be. Who
can question the right to show property
at the estimated market value? Right, in
this sense, is only limited by law. Or who
can object if some line of reasoning makes
it seem to those in whose judgment the
matter rests proper to take advantage of
some fine shade of distinction in accounting
theory? Either of two ways of treating a
matter may appear right, depending on
how one looks at it.
All these things are dictated more or less
by the emotions; by the desire to make a
favorable showing. Force of habit some­times
carries this idea to the extent of
"rigging" statements when there is really
no need for it. Past treatment of some
item may interfere with a change, but
more frequently it is some erroneous notion
as to the psychological effect on readers of
telling the straight story.
The unemotional balance sheet sets forth
the cold, unvarnished facts, so that he
who runs may read to the limit either of his
own intelligence or the intelligence of some
expert adviser. It is a balance sheet in
which there are no questionable assets
other than those which have been con­servatively
valued. Full acknowledgment
and statement has been made of all known