Financial Accounting

Summary

This book deals with the pension accounting information in Japan and it lays out the four related analyses. 1) the determinants of Japanese corporate pension funding, 2) the equity valuation of unfunded pension liabilities, 3) the determinants of amortization periods for unfunded liabilities at the beginning of new pension accounting, and 4) the determinants of assumed discount rate under pension accounting disclosures. By using Japanese company data over the last two decades, these empirical issues have been fully examined. The key underlying factors are corporate tax savings for the first two issues and debt covenant contracts for the rest, and they seem to explain the Japanese managerial behavior and the stock market valuation.