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Article: The effect of pension accounting on corporate pension asset allocation

TitleThe effect of pension accounting on corporate pension asset allocation
Authors
KeywordsDefined benefit plans
FRS 17
IAS 19
Pension asset allocation
Pension surplus/deficit
SFAS 158
Issue Date2010
PublisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=1380-6653
Citation
Review Of Accounting Studies, 2010, v. 15 n. 2, p. 345-366 How to Cite?
AbstractWe examine the impact of new pension disclosures and subsequent full pension recognition under FRS 17 and IAS 19 in the United Kingdom and SFAS 158 in the United States on pension asset allocation. These standards require recognition of net pension surplus/deficit on the balance sheet and actuarial gains/losses in other comprehensive income. Therefore, these standards introduce volatility into comprehensive income and balance sheets. We identify a disclosure period during which UK companies disclosed all the required data under FRS 17 in the notes without recognition. We also identify a full recognition period starting 1 year before until 1 year after the adoption of FRS 17/IAS 19 (UK) and SFAS 158 (US). We predict and find that UK companies, on average, shifted pension assets from equity to debt securities during both the disclosure and the full recognition periods. We also find that while before the adoption of SFAS 158 US companies maintained a stable allocation to equities and bonds, these companies, on average, shifted funds from equities to bonds around the adoption of SFAS 158. Cross-sectional analysis shows that the shift away from equities is related to changes in funding levels, shorter investment horizons, increased financial leverage, and the expected impact of the new standards on shareholders' equity. © 2009 Springer Science+Business Media, LLC.
Persistent Identifierhttp://hdl.handle.net/10722/129446
ISSN
2015 Impact Factor: 1.513
2015 SCImago Journal Rankings: 2.039
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorAmir, Een_HK
dc.contributor.authorGuan, Yen_HK
dc.contributor.authorOswald, Den_HK
dc.date.accessioned2010-12-23T08:37:20Z-
dc.date.available2010-12-23T08:37:20Z-
dc.date.issued2010en_HK
dc.identifier.citationReview Of Accounting Studies, 2010, v. 15 n. 2, p. 345-366en_HK
dc.identifier.issn1380-6653en_HK
dc.identifier.urihttp://hdl.handle.net/10722/129446-
dc.description.abstractWe examine the impact of new pension disclosures and subsequent full pension recognition under FRS 17 and IAS 19 in the United Kingdom and SFAS 158 in the United States on pension asset allocation. These standards require recognition of net pension surplus/deficit on the balance sheet and actuarial gains/losses in other comprehensive income. Therefore, these standards introduce volatility into comprehensive income and balance sheets. We identify a disclosure period during which UK companies disclosed all the required data under FRS 17 in the notes without recognition. We also identify a full recognition period starting 1 year before until 1 year after the adoption of FRS 17/IAS 19 (UK) and SFAS 158 (US). We predict and find that UK companies, on average, shifted pension assets from equity to debt securities during both the disclosure and the full recognition periods. We also find that while before the adoption of SFAS 158 US companies maintained a stable allocation to equities and bonds, these companies, on average, shifted funds from equities to bonds around the adoption of SFAS 158. Cross-sectional analysis shows that the shift away from equities is related to changes in funding levels, shorter investment horizons, increased financial leverage, and the expected impact of the new standards on shareholders' equity. © 2009 Springer Science+Business Media, LLC.en_HK
dc.languageengen_US
dc.publisherSpringer New York LLC. The Journal's web site is located at http://springerlink.metapress.com/openurl.asp?genre=journal&issn=1380-6653en_HK
dc.relation.ispartofReview of Accounting Studiesen_HK
dc.rightsThe original publication is available at www.springerlink.comen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.rightsThe original publication is available at www.springerlink.com-
dc.subjectDefined benefit plansen_HK
dc.subjectFRS 17en_HK
dc.subjectIAS 19en_HK
dc.subjectPension asset allocationen_HK
dc.subjectPension surplus/deficiten_HK
dc.subjectSFAS 158en_HK
dc.titleThe effect of pension accounting on corporate pension asset allocationen_HK
dc.typeArticleen_HK
dc.identifier.emailGuan, Y: ylguan@hkucc.hku.hken_HK
dc.identifier.authorityGuan, Y=rp01064en_HK
dc.description.naturepostprint-
dc.identifier.doi10.1007/s11142-009-9102-yen_HK
dc.identifier.scopuseid_2-s2.0-77953026743en_HK
dc.identifier.hkuros178056en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-77953026743&selection=ref&src=s&origin=recordpageen_HK
dc.identifier.volume15en_HK
dc.identifier.issue2en_HK
dc.identifier.spage345en_HK
dc.identifier.epage366en_HK
dc.identifier.eissn1573-7136-
dc.identifier.isiWOS:000278121500005-
dc.publisher.placeUnited Statesen_HK
dc.identifier.scopusauthoridAmir, E=7004440694en_HK
dc.identifier.scopusauthoridGuan, Y=16024282900en_HK
dc.identifier.scopusauthoridOswald, D=23489958100en_HK
dc.identifier.citeulike4289320-

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