• norsk
    • English
  • English 
    • norsk
    • English
  • Login
View Item 
  •   Home
  • Norges Handelshøyskole
  • Thesis
  • Master Thesis
  • View Item
  •   Home
  • Norges Handelshøyskole
  • Thesis
  • Master Thesis
  • View Item
JavaScript is disabled for your browser. Some features of this site may not work without it.

The impact of IAS 19 R on shareholder wealth and firms’ actuarial choices : evidence from the Oslo Stock Exchange

Ogudugu, David
Master thesis
Thumbnail
View/Open
masterthesis.PDF (673.7Kb)
URI
http://hdl.handle.net/11250/2559987
Date
2018
Metadata
Show full item record
Collections
  • Master Thesis [4207]
Abstract
The purpose of this study is to examine the effects of the amendments to the IFRS accounting

standard, IAS 19 (Employee Benefits), on firms listed on the Oslo Stock Exchange. More

specifically, the effect on defined-benefit pension plan sponsors that used the “corridor

method” to defer the recognition of actuarial gains and losses prior to the revision. IAS 19 R,

which has been in effect since the financial year 2013, requires firms to recognize actuarial

gains and losses in other comprehensive income on a continuous basis, and accumulated

corridor values had to be recognized during the effective year. This had a negative effect on

shareholders’ equity for defined-benefit plan sponsors on average, and I investigate both

market reactions to the announcements leading up to the revision and the changes in firms’

actuarial choices for defined-benefit plans leading up to the effective year. I find that firms

that used the corridor method during the issuance of the near-final draft of IAS 19 R

experienced lower abnormal returns than other firms on average during this announcement,

but that this effect was mostly driven by leverage. The negative impact of leverage on

abnormal returns was, however, stronger for firms with negative corridor values during the

release of the exposure draft and the near-final draft. I also find that highly leveraged firms

used more liberal actuarial assumptions when estimating the pension liability in the years

leading up to the revision, but that this effect diminished during the effective year. Lastly, I

found that firms that had negative corridors in 2012 changed their actuarial assumptions more

aggressively than other defined-benefit sponsors in 2013, thereby reducing the accumulated

corridor value that had to be recognized. The effect of leverage on actuarial choices is

somewhat consistent with previous research on pensions and earnings management, but the

findings in this study present new insights regarding IAS 19 in Norway specifically. Overall,

the findings suggest that the IAS 19 revision has improved the quality of pension accounting.

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit
 

 

Browse

ArchiveCommunities & CollectionsBy Issue DateAuthorsTitlesSubjectsDocument TypesJournalsThis CollectionBy Issue DateAuthorsTitlesSubjectsDocument TypesJournals

My Account

Login

Statistics

View Usage Statistics

Contact Us | Send Feedback

Privacy policy
DSpace software copyright © 2002-2019  DuraSpace

Service from  Unit