diff --git a/hledger-lib/Hledger/Reports/MultiBalanceReport.hs b/hledger-lib/Hledger/Reports/MultiBalanceReport.hs
index 4acba4e20..442f25c80 100644
--- a/hledger-lib/Hledger/Reports/MultiBalanceReport.hs
+++ b/hledger-lib/Hledger/Reports/MultiBalanceReport.hs
@@ -344,7 +344,7 @@ displayedAccounts :: ReportOpts -> Query
                   -> HashMap AccountName [Account]
                   -> HashMap AccountName DisplayName
 displayedAccounts ropts q valuedaccts
-    | depth == 0 = HM.singleton "..." $ DisplayName "..." "..." 0
+    | depth == 0 = HM.singleton "..." $ DisplayName "..." "..." 1
     | otherwise  = HM.mapWithKey (\a _ -> displayedName a) displayedAccts
   where
     -- Accounts which are to be displayed
@@ -352,19 +352,18 @@ displayedAccounts ropts q valuedaccts
       where
         keep name amts = isInteresting name amts || name `HM.member` interestingParents
 
-    isDisplayed = (`HM.member` displayedAccts)
-
     displayedName name
-        | flat_ ropts = DisplayName name droppedName 0
-        | otherwise   = DisplayName name leaf d
+        | flat_ ropts = DisplayName name droppedName 1
+        | otherwise   = DisplayName name leaf $ level - boringParents
       where
-        leaf = accountNameFromComponents . reverse . map accountLeafName $
-            droppedName : takeWhile (not . isDisplayed) parents
-        d | no_elide_ ropts = accountNameLevel droppedName
-          | otherwise       = accountNameLevel droppedName - length boringParents
-        boringParents = filter (not . isDisplayed) parents
-        parents = parentAccountNames droppedName
         droppedName = accountNameDrop (drop_ ropts) name
+        leaf = accountNameFromComponents . reverse . map accountLeafName $
+            droppedName : takeWhile notDisplayed parents
+
+        level = accountNameLevel name - drop_ ropts
+        parents = take (level - 1) $ parentAccountNames name
+        boringParents = if no_elide_ ropts then 0 else length $ filter notDisplayed parents
+        notDisplayed = not . (`HM.member` displayedAccts)
 
     -- Accounts interesting for their own sake
     isInteresting name amts =
diff --git a/hledger-lib/Hledger/Reports/ReportTypes.hs b/hledger-lib/Hledger/Reports/ReportTypes.hs
index 1d4084d20..e4ee6541f 100644
--- a/hledger-lib/Hledger/Reports/ReportTypes.hs
+++ b/hledger-lib/Hledger/Reports/ReportTypes.hs
@@ -139,14 +139,15 @@ instance ToJSON DisplayName where
     toEncoding = toEncoding . displayFull
 
 -- | Construct a flat display name, where the full name is also displayed at
--- depth 0
+-- depth 1
 flatDisplayName :: AccountName -> DisplayName
-flatDisplayName a = DisplayName a a 0
+flatDisplayName a = DisplayName a a 1
 
 -- | Construct a tree display name, where only the leaf is displayed at its
 -- given depth
 treeDisplayName :: AccountName -> DisplayName
 treeDisplayName a = DisplayName a (accountLeafName a) (accountNameLevel a)
+
 -- | Get the full, canonical, name of a PeriodicReportRow tagged by a
 -- DisplayName.
 prrFullName :: PeriodicReportRow DisplayName a -> AccountName
diff --git a/tests/balance/drop.test b/tests/balance/drop.test
new file mode 100644
index 000000000..0b97327d1
--- /dev/null
+++ b/tests/balance/drop.test
@@ -0,0 +1,43 @@
+# 1. Drop works in flat mode
+<
+2018/1/1
+  (b:j)  1
+
+2018/1/1
+  (b:j:q)  1
+
+2018/1/1
+  (c)    1
+
+2018/1/1
+  (b:i:p)  1
+
+2018/1/1
+  (a:k)  1
+
+$ hledger -f - balance --flat --no-total --drop 1
+                   1  k
+                   1  i:p
+                   1  j
+                   1  j:q
+                   1  ...
+>=
+
+## 2. Drop works in tree mode with no boring parent ellision
+$ hledger -f - balance --tree --no-elide --no-total --drop 1
+                   1  k
+                   1  i
+                   1    p
+                   2  j
+                   1    q
+                   1  ...
+>=
+
+## 3. Drop works in tree mode with boring parent ellision
+$ hledger -f - balance --tree --no-total --drop 1
+                   1  k
+                   1  i:p
+                   2  j
+                   1    q
+                   1  ...
+>=