The Logic of Pension Accounting

Accounting and Business Research, Vol. 39, No. 3, 2009

International Accounting Policy Forum. pp. 231-249, 2009

Royal Holloway, University of London, School of Management Working Paper No. 0807

30 Pages Posted: 6 Apr 2011

See all articles by Christopher J. Napier

Christopher J. Napier

University of London - Royal Holloway College - School of Management

Date Written: December 1, 2008

Abstract

Accounting for pensions has been a problem for standard setters for over 30 years. Early attempts to develop accounting standards were based on a cost orientation and reflected funding considerations. More recently, a balance sheet focus has led to issues over identification and measurement of pension liabilities and assets. Accounting standards that permit enterprises to ignore, spread or segregate elements of pension cost, or to create artificial cost measures, are open to criticism and are gradually disappearing. The aim of a principle-based pension accounting will be to ‘tell it as it is’, fairly reflecting the rights and obligations of employers, employees and funding vehicles. Moreover, complex pension arrangements cannot be reported simplistically – if users wish to minimise surprises relating to pensions, then enterprises must disclose a rich set of information.

Keywords: Financial reporting, pensions, retirement benefits, accounting standards, liabilities, actuarial gains and losses

Suggested Citation

Napier, Christopher John, The Logic of Pension Accounting (December 1, 2008). Accounting and Business Research, Vol. 39, No. 3, 2009; Royal Holloway, University of London, School of Management Working Paper No. 0807. Available at SSRN: https://ssrn.com/abstract=1803352 or http://dx.doi.org/10.2139/ssrn.1803352

Christopher John Napier (Contact Author)

University of London - Royal Holloway College - School of Management ( email )

Egham
Surrey, Egham TW20 8DG
United Kingdom

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