Advanced Search
MyIDEAS: Login to save this article or follow this journal

Value relevance of alternative methods of accounting for actuarial gains and losses

Contents:

Author Info

  • Ana Isabel Morais
Registered author(s):

    Abstract

    In 2010, IASB published an exposure draft about defined benefit plans where it proposed to eliminate the deferred recognition of actuarial gains and losses. IASB aimed to make fundamental improvements to the recognition, presentation and disclosures of defined benefit plans by mid-2011. To shed light on the debate on the recognition of actuarial gains and losses of defined benefit plans, this paper investigates the value relevance of financial information under three alternative methods of recognising actuarial gains and losses allowed by IAS 19: employee benefits (2004): the profit or loss method, the equity recognition method and the corridor method. Findings suggest that the equity recognition method, i.e., the recognition of all actuarial gains and losses in equity, best reflects the market's valuation of actuarial gains and losses of defined benefit plans.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.inderscience.com/link.php?id=43966
    Download Restriction: Access to full text is restricted to subscribers.

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Bibliographic Info

    Article provided by Inderscience Enterprises Ltd in its journal Int. J. of Accounting, Auditing and Performance Evaluation.

    Volume (Year): 8 (2012)
    Issue (Month): 1 ()
    Pages: 69-90

    as in new window
    Handle: RePEc:ids:ijaape:v:8:y:2012:i:1:p:69-90

    Contact details of provider:
    Web page: http://www.inderscience.com/browse/index.php?journalID=41

    Related research

    Keywords: actuarial gains; actuarial losses; corridor method; equity recognition; defined benefit plans; pensions; value relevance; alternative accounting methods; financial information.;

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 2001. "The relevance of the value relevance literature for financial accounting standard setting: another view," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 31(1-3), pages 77-104, September.
    2. Hann, Rebecca N. & Heflin, Frank & Subramanayam, K.R., 2007. "Fair-value pension accounting," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 44(3), pages 328-358, December.
    3. Holthausen, Robert W. & Watts, Ross L., 2001. "The relevance of the value-relevance literature for financial accounting standard setting," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 31(1-3), pages 3-75, September.
    4. Julia Coronado & Olivia S. Mitchell & Steven A. Sharpe & S. Blake Nesbitt, 2008. "Footnotes aren’t enough: the impact of pension accounting on stock values," Finance and Economics Discussion Series, Board of Governors of the Federal Reserve System (U.S.) 2008-04, Board of Governors of the Federal Reserve System (U.S.).
    5. Barth, Mary E. & Beaver, William H. & Landsman, Wayne R., 1992. "The market valuation implications of net periodic pension cost components," Journal of Accounting and Economics, Elsevier, Elsevier, vol. 15(1), pages 27-62, March.
    6. Matthias Amen, 2007. "Simulation-Based Comparison of Existent IAS 19 Accounting Options," European Accounting Review, Taylor & Francis Journals, Taylor & Francis Journals, vol. 16(2), pages 243-276.
    7. Clara Severinson, 2008. "Accounting for Defined Benefit Plans: An International Comparison of Exchange-Listed Companies," OECD Working Papers on Insurance and Private Pensions 23, OECD Publishing.
    8. Julia Lynn Coronado & Steven A. Sharpe, 2003. "Did Pension Plan Accounting Contribute to a Stock Market Bubble?," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 34(1), pages 323-371.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ids:ijaape:v:8:y:2012:i:1:p:69-90. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Graham Langley).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.