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Adoption of IAS 19R by Europe's premier listed companies: Corridor approach versus full recognition

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  • Fasshauer, Jan D.
  • Glaum, Martin
  • Street, Donna L.

Abstract

This report provides a summary of a research monograph sponsored by the Association of Chartered Certified Accountants (ACCA) [Fasshauer, J., Glaum, M., & Street, D. L. (2008). Adoption of IAS 19R by Europe's premier listed companies: Corridor approach versus full recognition. An ACCA research report, London] and is based on our in-depth analysis of the defined benefit pension plan disclosures provided in the year 2005 by companies constituting the premier segments of 20 European exchanges. Most importantly, the study identifies the method these companies selected under International Accounting Standard (IAS) 19 for the recognition of actuarial gains/losses, provides insight into factors affecting the policy choice between the methods allowed under IAS 19 for the recognition of actuarial gains/losses, and assesses the impact on profit and loss (P&L) and the balance sheet of using the new IAS 19 option of full recognition through the Statement of Recognized Gains and Losses (SORIE), in contrast to the traditional corridor approach. We also benchmark key pension assumptions against relevant country or industry averages.

Suggested Citation

  • Fasshauer, Jan D. & Glaum, Martin & Street, Donna L., 2008. "Adoption of IAS 19R by Europe's premier listed companies: Corridor approach versus full recognition," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 17(2), pages 113-122.
    • Handle: RePEc:eee:jiaata:v:17:y:2008:i:2:p:113-122
    DOI: 10.1016/j.intaccaudtax.2008.07.005
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    Cited by:

    1. Izabella KRÁJNIK & Laura OLTEANU, 2013. "Tendencies And Challenges Of Employee Benefits Accounting," SEA - Practical Application of Science, Romanian Foundation for Business Intelligence, Editorial Department, issue 1, pages 285-291, June.
    2. repec:cmj:journl:y:2013:i:28:krajniki,olteanul is not listed on IDEAS
    3. Mohammad Hamdan & Marie Bany Khaled & Sakhr Bany Khaled, 2018. "Employee Benefits Accounting, Its Impact on the Market Share Price, the Volume of Credit Facilities and Deposits," International Journal of Economics and Finance, Canadian Center of Science and Education, vol. 10(1), pages 23-31, January.
    4. Samira Demaria & Dufour Dominique & Moïse Louisy-Louis & Philippe Luu, 2012. "An exploratory study of the exposure draft of IAS 19 due process," Post-Print halshs-00721326, HAL.
    5. Tobias Witter & Thorsten Sellhorn & Jens Müller & Vicky Kiosse, 2022. "Balance sheet smoothing," Berlin School of Economics Discussion Papers 0006, Berlin School of Economics.
    6. Sara Paralta, 2014. "Accounting Standards and Market Value of Firms with Pension Plans," International Journal of Business and Social Research, LAR Center Press, vol. 4(11), pages 31-42, November.
    7. Josiah, J. & Gough, O. & Haslam, J. & Shah, N., 2014. "Corporate reporting implication in migrating from defined benefit to defined contribution pension schemes: A focus on the UK," Accounting forum, Elsevier, vol. 38(1), pages 18-37.
    8. Marco Fasan & Carlo Marcon, 2018. "Accounting Choice under IFRS: The Role of Accounting Tradition and Managerial Opportunism," International Journal of Academic Research in Accounting, Finance and Management Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Accounting, Finance and Management Sciences, vol. 8(3), pages 209-223, July.
    9. Christopher Hodgdon & Susan B. Hughes & Donna L. Street, 2011. "Framework-based Teaching of IFRS Judgements," Accounting Education, Taylor & Francis Journals, vol. 20(4), pages 415-439, April.
    10. Mark Billings & Christopher O’Brien & Margaret Woods & Dev Vencappa, 2017. "Discretion in accounting for pensions under IAS 19: using the ‘magic telescope’?," Accounting and Business Research, Taylor & Francis Journals, vol. 47(2), pages 123-143, February.
    11. Ana Isabel Morais, 2012. "Value relevance of alternative methods of accounting for actuarial gains and losses," International Journal of Accounting, Auditing and Performance Evaluation, Inderscience Enterprises Ltd, vol. 8(1), pages 69-90.
    12. Sara Paralta, 2014. "Accounting Standards and Market Value of Firms with Pension Plans," International Journal of Business and Social Research, MIR Center for Socio-Economic Research, vol. 4(11), pages 31-42, November.
    13. Al-Own, Bassam & Minhat, Marizah & Gao, Simon, 2018. "Stock options and credit default swaps in risk management," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 53(C), pages 200-214.
    14. Martin Glaum, 2009. "Pension accounting and research: A review," Accounting and Business Research, Taylor & Francis Journals, vol. 39(3), pages 273-311.
    15. Dykxhoorn, Hans J. & Sinning, Kathleen E., 2010. "A review and analysis of international accounting research in JIAAT: 2002–2010," Journal of International Accounting, Auditing and Taxation, Elsevier, vol. 19(2), pages 137-153.
    16. Jan Faßhauer & Martin Glaum & Tobias Keller & Donna L. Street, 2011. "Erfassungsmethoden für versicherungsmathematische Gewinne und Verluste nach IAS 19: Motive der Wahl-rechtsentscheidung europäischer Unternehmen," Schmalenbach Journal of Business Research, Springer, vol. 63(8), pages 774-809, December.

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