We investigate how managers smooth volatility in balance sheets, using the pension accounting change IAS 19R as a shock to balance sheet volatility. This shock increases pension plans’ funding transparency, which is the source of volatility, without targeting actual plan funding. We find that...

We document equity market reactions to an exogenous increase in expected balance sheet volatility – the time-series variation in equity book values. Our study is motivated by recent trends in accounting standard setting towards a ‘balance sheet approach’, which increases balance sheet...

Several studies document ex-post effects of accounting standards on firms’ business activities – such as reduced lease financing, R&D, or hedging. Are such ‘real effects’ unforeseen by accounting standard setters (as is sometimes assumed), or might they even be intended – to promote...

This paper studies real effects arguments – claims that accounting standards causally affect preparers’ actions in the real economy – in the context of IFRS standard setting. To identify such real effects arguments, we apply semi-automated content analysis to the 426 due process documents...