"Measurement of Periodical Pension Expenses"(in Japanese)

Two fictions are used in measuring accounting pension expenses. First, the periodical pension expenses are, not the results of allocation of firm's contributions, but the sum of the allocated costs of pension benefits to the employee and the realized returns (deduction from pension expenses) from pension assets in the period. In this stage, cashoutflows of contributions are divided into the outflows of pension benefits and the inflows of returns. Second, through discounting the future cash-flows in allocating pension benefits, the outflows of pension benefits are divided into the flow of 'service cost' and the flow of 'interest cost', and these fictitious flows are allocated over different periods and in the different pattern. The purpose of dividing the real flow into accounting fictitious flows is to set the accounting standard of measuring expenses that can be equally applied to both the corporate pension plans and the retirement money (TAISYOKUKIN) plans. In its background, the value judgement exists, that is: since the payments in the both plans means equally the cost of consumed labor services, accounting rules for two plans must, in the view of 'substance over form', be unified or integrated. However, because only one cash-flow can be observed empirically, the accounting measurement methods of dividing and making fictitious flows are inconsistent with the usual allocation rule, and those methods cannot be explained clearly from the view of the traditional accounting theory. Moreover, those methods unnecessarily bring about the meaningless confusion in accounting practice. This paper investigates the fictions in accounting measurement of pension expenses, and describes that those fictions are not the theoretical necessity. The result of this research is one of the evidence, that 'substance over form' has no 'meaningful substance'.