Incremental Value‐Relevance of SFAS 106

Review of Accounting and Finance - 2003
SharadAsthana1, BirendraMishra2
1Department of Accounting, Fox School of Business and Management, Temple University, Philadelphia, PA 19122
2Department of Accounting and Information Management, School of Management, University of Texas at Dallas, Richardson, TX 75083–0688

Tóm tắt

This study investigates the incremental value‐relevance of non‐pension postretirement benefit obligations and expenses (disclosed by firms pursuant to SFAS 106). Our study is motivated by previously published evidences that investors value the SFAS 106 measure of postretirement benefit obligations. However, prior research does not address incremental value‐relevance of the SFAS 106. We address two related questions. First, “do the SFAS 106 measures of non‐pension postretirement benefit obligations and expenses provide incremental value relevance (after controlling for information available from non‐SFAS 106 sources).” Second, “under what circumstances are the SFAS‐106 measures more likely to provide incremental value relevance.” The key findings of this paper are: (i) on average, SFAS 106 measures of postretirement benefit obligations and expenses have no significant incremental value‐relevance after controlling for non‐SFAS 106 information; and (ii) labor intensity and the magnitude of postretirement benefit obligation increases the incremental value‐relevance of SFAS 106 measures.

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Review of Accounting and Finance

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