Simulation-Based Comparison of Existent IAS 19 Accounting Options
We focus on accounting for unfunded defined benefit pension plans according to IAS 19 and compare the option to recognise any actuarial gain or loss immediately outside profit or loss in a separate statement within equity ('equity approach') with the 'corridor approach'. The objective is to detect systematic differences in long-term pure accounting effects, which can be seen by the different cumulated net-amounts not (yet) recognised in profit or loss. Due to the complexity and the probabilistic elements, human expectations on system behaviour often fail. Therefore, we have performed the first Monte-Carlo-simulation study of the accounting options. The assumptions concerning input data are based on official German statistics and, therefore, are representative at least for Germany and similar countries. As a result, the belief of long-term offsetting of cumulated actuarial gains and losses is not accurate. The former unforeseeable consequences are the following: if we apply the equity approach we identify a tendency for a quasi-permanent cumulated actuarial net-gain (regenerating workforce) or a permanent cumulated actuarial net-loss (degenerating workforce) recognised outside profit or loss. If the corridor approach is applied, a tendency for quasi-permanent cumulated unrecognised net-gains is reported while amortising any corridor excess in the case of a regenerating workforce.
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.
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.
Volume (Year): 16 (2007)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/REAR20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/REAR20|
When requesting a correction, please mention this item's handle: RePEc:taf:euract:v:16:y:2007:i:2:p:243-276. 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: (Michael McNulty)
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.