An Analysis of Critical Accounting Estimate Disclosures of Pension Assumptions

SYNOPSIS

Accounting for defined-benefit pension plans is complex, and reported financial statement amounts are significantly impacted by a myriad of assumptions. In its interpretative release FR-72 (SEC 2003), the SEC called for more informative and transparent Management Discussion and Analysis (MD&A) disclosure of critical accounting estimates (CAE), including those regarding pension plans. We find that 60 (61) percent of our sample firms ...more