What Does the Balance Sheet (Not) Show? Asset Valuation in the Hungarian Accounting System

M. Horváth, Gábor (2026) What Does the Balance Sheet (Not) Show? Asset Valuation in the Hungarian Accounting System. PÉNZÜGYI SZEMLE/PUBLIC FINANCE QUARTERLY, 72 (2). pp. 112-125. ISSN 0031-496X (nyomtatott); 2064-8278 (online)

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Abstract

In interpreting corporate financial statements, the balance sheet total is often treated as a direct measure of a firm’s wealth. However, continental accounting systems, including Hungarian accounting regulation, are grounded primarily in accrual accounting, realization, and capital protection. This study examines which firm-level factors are associated with the use of asset revaluation in the Hungarian corporate sector. The empirical analysis is based on the CrefoPort database for 2020-2024 and comprises 811,998 firm-year observations for 164,712 companies. The relationships are analyzed using a logistic regression model. The results show that revaluation is associated mainly with asset structure and firm size, while a significant relationship is also observed with the firm’s capital protection position. The analysis provides large-sample empirical evidence that, in the Hungarian accounting environment, asset revaluation does not function as a general technique for approximating corporate wealth.

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