An analysis of critical accounting estimate disclosures of pension assumptions, by Mark P. Bauman and Kenneth W. Shaw

Authors: Mark P. Bauman and Kenneth W. Shaw

Journal: Accounting Horizons

ABSTRACT: 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 (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. This paper uses a random sample of 147 firms with relatively large defined-benefit pension plans to analyze firms’ MD&A pension-related critical accounting estimate disclosures.

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