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Title:Pension accounting and corporate earnings: The world according to GAAP PDF Logo
Authors:Fortune, Peter
Issue Date:2005
Series/Report no.:Public policy Discussion Papers, Federal Reserve Bank of Boston 06,2
Abstract:This study's underlying premise is that current pension plan accounting has two important negative effects. First, it distorts the measurement of earnings and net worth in the short run, as well as the pattern of earnings over future periods. Second, this distortion can send incorrect signals to investors about a firm's health, resulting in the mispricing of a firm's outstanding debt and equity instruments. The author demonstrates how these distortions are introduced, examines the magnitude of the distortions, and discusses proposals for reform.
JEL:E01
G12
G23
G35
M41
Document Type:Working Paper
Appears in Collections:Public Policy Discussion Papers, Federal Reserve Bank of Boston

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