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A New Approach for Proper Reporting of Pension Benefit Obligations in the Financial Statements of “Old Funds” for Professionals

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  • Carla Morrone
  • Maria Teresa Bianchi
  • Anna Attias

Abstract

In this paper, we focus on the disclosure of pension liabilities for entities referred to in Italian Legislative Decree 30 June 1994 no. 509 (also called “old funds” for professionals), which is crucial for a suitable communication. After illustrating the limits of current statutory financial statements’ in relation to the information they provide on pension benefit obligations, we propose three potential solutions to bridge the gap. Each of these proposals helps ensure the completeness and clarity of financial reporting and improves upon the informational capacity and quality of disclosure. In our opinion, one of these approaches, in particular, would be preferred because of its ease of adoption. Indeed, the disclosure in the explanatory notes allows for the quantification of pension benefit obligations, and hence a more proper evaluation of entities in the medium/long- term, with no impact on annual economic-financial results as reported in the balance sheet and the income statement.

Suggested Citation

  • Carla Morrone & Maria Teresa Bianchi & Anna Attias, 2020. "A New Approach for Proper Reporting of Pension Benefit Obligations in the Financial Statements of “Old Funds” for Professionals," International Business Research, Canadian Center of Science and Education, vol. 13(8), pages 117-117, August.
    • Handle: RePEc:ibn:ibrjnl:v:13:y:2020:i:8:p:117
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    References listed on IDEAS

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    2. Angrisani, M. & Attias, A., 2004. "A mathematical model for the management of an invalidity old age survivor pension fund: the exact individual trajectories method," Pure Mathematics and Applications, Department of Mathematics, Corvinus University of Budapest, vol. 15(1), pages 1-15.
    3. Katherine Schipper & Marco Trombetta, 2010. "Measurement Issues in Financial Reporting," European Accounting Review, Taylor & Francis Journals, vol. 19(3), pages 425-428.
    4. Chaney, Barbara A. & Copley, Paul A. & Stone, Mary S., 2002. "The effect of fiscal stress and balanced budget requirements on the funding and measurement of state pension obligations," Journal of Accounting and Public Policy, Elsevier, vol. 21(4-5), pages 287-313.
    5. Selling, Thomas I. & Stickney, Clyde P., 1986. "Accounting measures of unfunded pension liabilities and the expected present value of future pension cash flows," Journal of Accounting and Public Policy, Elsevier, vol. 5(4), pages 267-285.
    6. Gianfranco Capodaglio & Matteo Santi & Ivanoe Tozzi, 2011. "The Introduction Of International Accounting Standards in the Italian Small and Medium Sized Entities," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 24(2), pages 126-136, January.
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    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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