Rules versus principles-based pension accounting standards: An analysis of comparability

Gordon, Isabel & Gallery, Natalie (2008) Rules versus principles-based pension accounting standards: An analysis of comparability. In 16th Annual Conference on Pacific Basin Finance, Economics, Accounting and Management, 2 - 4 July 2008, Brisbane, Australia.

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Motivated by Schipper and Vincent’s (2003) comment that comparability in financial reporting is under-researched, this paper analyses the comparability construct in the context of pension accounting. In practice, compromises or rules introduced into pension accounting standards are not based on principles but result from political bargaining (Daley and Tranter, 1990). Current pension accounting standards in the USA, Australia and the international pension accounting standard are compared using a "theoretical" benchmark to present the economic substance of the transaction. To develop the theoretical benchmark, Barth and Clinch's (1996) use of Ohlson's (1989) clean surplus model is adapted to articulate the sponsor’s profit and loss and balance sheet so that compromises are highlighted. This paper concludes that a principles-based approach that emphasises the economic substance and clean surplus approach need not necessarily compromise comparability.

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ID Code: 17076
Item Type: Conference Paper
Refereed: Yes
Additional Information: The contents of this conference proceedings can be freely accessed online via the publisher's web page (see hypertext link).
Keywords: Pension Accounting, Accounting Standards, Superannuation, Principles versus Rules, Comparability
ISBN: 9781741072426
Subjects: Australian and New Zealand Standard Research Classification > COMMERCE MANAGEMENT TOURISM AND SERVICES (150000) > ACCOUNTING AUDITING AND ACCOUNTABILITY (150100) > Financial Accounting (150103)
Divisions: Current > QUT Faculties and Divisions > QUT Business School
Current > Schools > School of Accountancy
Copyright Owner: Copyright 2008 Isabel Gordon and Natalie Gallery
Deposited On: 05 Jan 2009 00:21
Last Modified: 29 Feb 2012 13:52

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