Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5087003 | Journal of Accounting and Economics | 2007 | 31 Pages |
Abstract
We compare the value and credit relevance of financial statements under fair-value and smoothing (SFAS-87) models of pension accounting. While fair-value improves the credit relevance of the balance sheet, it does not improve its value relevance. Further, fair-value impairs both the value and credit relevance of the income statement and the combined financial statements unless transitory gains and losses (G&L) are separated from more persistent income components. Overall, our results suggest there are no informational benefits to adopting a fair-value pension accounting model.
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Accounting
Authors
Rebecca N. Hann, Frank Heflin, K.R. Subramanayam,