This study's underlying premise is that current pension plan accounting has two important negative effects. First, it distorts the measurement of earnings and net worth in the short run, as well as the pattern of earnings over future periods. Second, this distortion can send incorrect signals to...

In the Netherlands, listed companies and their pension funds have to apply the principle of fair value accounting with respect to valuation of pension liabilities for their financial statements. Both entities have to implement fair value accounting somewhat differently, as companies have to...

In this article, we provide empirical evidence of an important economic consequence after major changes in accounting standards. More precisely, we document that several companies have switched their pension scheme from a traditional defined benefit (db) scheme to a defined contribution (dc)...

In the Netherlands, listed companies and their pension funds have to apply the principle of fair value accounting with respect to valuation of pension liabilities for their financial statements. Both entities have to implement fair value accounting somewhat differently, as companies have to...

Focusing on closed-end investment funds, this paper examines whether the value relevance attached to the fair value estimates is influenced by the type of investment being held. Our premise is that the fair values of different investment types rely on different valuation models and imply...

Private equity fund managers, pension fund managers, and investment advisers assert that private equity investments diversify investors' portfolios. We show that cost-based methods of accounting understate the systematic risk of private equity, creating an illusion of diversification. After...

The International Financial Reporting Standards (IFRS) must pass a formal endorsement process to become binding for companies based in the European Union (EU). In an unparalleled instance, the EU recently endorsed “Amendments to IFRS 4” with a modification labeled as “top up” by allowing...

Proponents of IFRS argue that mandating a uniform set of accounting standards improves financial statement comparability that in turn attracts greater cross-border investment. We test this assertion by examining changes in foreign mutual fund investment in firms following mandatory IFRS adoption...

This study investigates the association between pension accounting information and both firm value and credit ratings. My findings indicate that fair-value-based pension accounting information is not more evaluation relevant (often termed value relevant in prior literature relating specifically...

We compare the value and credit relevance of financial statements under fair-value and smoothing (SFAS-87) models of pension accounting. The fair-value model does not improve the value relevance of the balance sheet and may impair that of income and the combined financial statements, unless...