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| Author: | Hann, R. N. Heflin, F. Subramanayam, K. R. |
| Title: | Fair-value pension accounting |
| Journal: | Journal of Accounting & Economics
2007 : DEC, VOL. 44:3 p. 328-358 |
| Index terms: | capital markets pensions accounting standards |
| Language: | eng |
| Abstract: | The study compares the value and credit relevance of financial statements under fair-value and smoothing (SFAS-87) models of pension accounting. The results reveal that while fair-value improves the credit relevance of the balance sheet, it does not improve its value relevance. Furthermore, fair-value can impair 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, there seems to be no informational benefits to adopting a fair-value pension accounting model. |
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