Recognition of actuarial gains and losses under IAS 19 among UK Listed Companies

摘要

The requirement for UK listed companies to prepare their financial statements in accordance with IFRS for accountingudperiods beginning on or after January 1, 2005 provided these companies with an accounting policy choice in the area ofudpension accounting. Probit models indicate that the characteristics of size of firm and interest coverage are significantuddeterminants influencing the choice of accounting policy. Therefore, managers are likely motivated to make the incomesmoothingudaccounting choice (the use of the “corridor” method) when size of firm and interest coverage are large, whileudthe more volatile full recognition policy is more likely to be chosen when size of firm and interest coverage are small.udThese findings support the argument that the retention of options in IFRS may operate to the detriment of key stakeholders,udin particular equity investors, by providing opportunities for earnings management.