The Economic Consequences of GASB Financial Statement Disclosure

62 Pages Posted: 9 Mar 2020 Last revised: 6 Jun 2024

See all articles by Michael Dambra

Michael Dambra

University at Buffalo (SUNY) - School of Management

Omri Even-Tov

Haas School of Business - UC Berkeley

James P. Naughton

University of Virginia, Darden School of Business

Date Written: October 19, 2022

Abstract

We examine whether Governmental Accounting Standards Board (GASB) financial statement disclosure alters local governments’ economic decision-making. To do so, we exploit a recent GASB standard that eliminated differences in the disclosure requirements for county governments’ pension obligations. The standard, GASB 68, had no effect on pension economics or the annual budget—it only affected whether and how information was presented on GASB financial statements. Using a broad hand-collected dataset, we document that counties that did not disclose information about their pension obligations before GASB 68 reduced public welfare expenditures, employment, and salary expenses relative to those that had disclosed such information. We conduct extensive field research and employ several cross-sectional analyses to conclude that the effects we document are in part driven by increased awareness of the financial costs of pension obligations by newly disclosing counties.

Keywords: GASB 68, Disclosure, Real effects, Public pension, managerial learning, pension accounting, GASB

JEL Classification: M41, M48, H7

Suggested Citation

Dambra, Michael and Even-Tov, Omri and Naughton, James P., The Economic Consequences of GASB Financial Statement Disclosure (October 19, 2022). Journal of Accounting & Economics (JAE), Forthcoming, Journal of Accounting and Economics, volume 75, issue 2-3, 2023 [10.1016/j.jacceco.2022.101555], Available at SSRN: https://ssrn.com/abstract=3538354 or http://dx.doi.org/10.1016/j.jacceco.2022.101555

Michael Dambra (Contact Author)

University at Buffalo (SUNY) - School of Management ( email )

255 Jacobs Management Center
Buffalo, NY 14260
United States

Omri Even-Tov

Haas School of Business - UC Berkeley ( email )

Haas School of Business
Berkeley, CA 94720
United States
3104302236 (Phone)

James P. Naughton

University of Virginia, Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
384
Abstract Views
2,793
Rank
145,968
PlumX Metrics