Recognition, disclosure, or delay: timing the adoption of SFAS No. 106

Article Abstract:

Early adopters of Statement of Financial Accounting Standards (SFAS) No. 106: Employers' Accounting for Post-Retirement Benefits Other Than Pensions experience more extreme earnings changes during the adoption year, compared to late adopters. This was one of the main findings in a study of the timing and method of adoption of SFAS No. 106, which was prompted by the Financial Accounting Standard Board's policy of extending the adoption period of new accounting standards beyond one fiscal year. It was also found that early adopters have smaller post-retirement benefit liabilities than firms disclosing their liabilities without adoption or firms deferring adoption. A more favorable market reaction was noted among early adopters compared to disclosers. A substantial difference was also observed between the market-adjusted return on a portfolio of 1991 adopters and the market-adjusted return on a portfolio of 1993 adopters.

Retirement benefits, Financial Accounting Standards Board

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The financial and market effects of the SEC's accounting and auditing enforcement releases

Article Abstract:

The accounting and auditing enforcement program of the Securities and Exchange Commission (SEC) is examined in relation to the issuance of Accounting and Auditing Enforcement Releases (AAERs). The problems that necessitate AAERs, the sanctions that are imposed on companies as a result of investigations of these problems, and the views of market agents regarding the SEC's enforcement actions are extensively discussed. The enforcement actions of the SEC come in the form of warnings to auditors to strictly follow regulations as prescribed in the Generally Accepted Accounting Principles and the Generally Accepted Auditing Standards.

Regulation misc. commercial sectors, Laws, regulations and rules, Auditing, United States. Securities and Exchange Commission

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A comment on corporate preferences for foreign currency accounting standards

Article Abstract:

Gray's 1984 article 'Corporate Preferences for Foreign Currency Accounting Standards' is evaluated and shortcomings noted. Examining the transition period in which firms could chose either Statement of Financial Accounting Standards (SFAS) No. 9 or No. 52, Gray concluded that companies that reported a net exchange gain under SFAS No. 8 would report lower net incomes under SFAS No. 52. But it is impossible to make such a determination and several cases demonstrate the opposite. Several firms later provided information on the effects of the changes and this information shows mixed results.

Evaluation, Foreign exchange, Gray, D.

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