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How Actuarial Assumptions Affect Defined Benefit Obligations under International Financial Reporting Standards. Evidence from Korea

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  • Kwanghee Cho
  • YoungJun Kim
  • Sang Kyoo Yoon

Abstract

type="main"> This paper examines how actuarial assumptions affect defined benefit obligations (DBOs) under the newly adopted Korean International Financial Reporting Standards (K-IFRS) with the help of evaluation reports provided by the pension provider. The results show that there is no significant discrepancy between the DBOs estimated on a going concern basis under K-IFRS, and the retirement benefits estimated on a non-going concern basis under traditional K-GAAP. Also, the rate of salary increase, average salary and average years of service have a statistically significant positive impact on DBOs, irrespective of the adoption of K-IFRS.

Suggested Citation

  • Kwanghee Cho & YoungJun Kim & Sang Kyoo Yoon, 2014. "How Actuarial Assumptions Affect Defined Benefit Obligations under International Financial Reporting Standards. Evidence from Korea," Australian Accounting Review, CPA Australia, vol. 24(3), pages 255-261, September.
    • Handle: RePEc:bla:ausact:v:24:y:2014:i:3:p:255-261
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    File URL: http://hdl.handle.net/10.1111/auar.12051
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    References listed on IDEAS

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    1. Sharad Asthana, 1999. "Determinants of Funding Strategies and Actuarial Choices for Defined†Benefit Pension Plans," Contemporary Accounting Research, John Wiley & Sons, vol. 16(1), pages 39-74, March.
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    3. Isabel Gordon, 2012. "Superannuation in Society: What are the Accountability Relationships and is there a Role for (Group) Accounting?," Australian Accounting Review, CPA Australia, vol. 22(2), pages 142-154, June.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    5. Grantley Taylor & Greg Tower, 2011. "Determinants of Financial Ratio Disclosure Patterns of Australian Listed Extractive Companies," Australian Accounting Review, CPA Australia, vol. 21(3), pages 302-314, September.
    6. Thomas, Jacob K., 1988. "Corporate taxes and defined benefit pension plans," Journal of Accounting and Economics, Elsevier, vol. 10(3), pages 199-237, July.
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    1. Martina K. Linnenluecke & Jacqueline Birt & Xiaoyan Chen & Xin Ling & Tom Smith, 2017. "Accounting Research in Abacus, A&F, AAR, and AJM from 2008–2015: A Review and Research Agenda," Abacus, Accounting Foundation, University of Sydney, vol. 53(2), pages 159-179, June.

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