What question did this study set out to answer?

To assess how investors evaluate postretirement benefits other than pensions and the relevance of present-value estimates in firm valuation.

March 18, 2026The Accounting Review

The Market Valuation of Accounting Information: The Case of Postretirement Benefits other than Pensions.

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Authors

EAEli Amir

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Implication

Ex ante evaluation finds investors underestimate the impact of postretirement benefits on firm value, suggesting implications for regulatory accounting.

Key Points

To assess how investors evaluate postretirement benefits other than pensions and the relevance of present-value estimates in firm valuation.
Used data from PRB cash payments disclosed in financial statements under SFAS No. 81.
Examined the market valuations relative to postretirement benefits during the FASB's deliberations.
Analyzed sensitivity of economic parameters affecting estimates of PRB obligations.
Investors undervalued the full impact of PRB payments, valuing $1 of cash payment as $1 of obligation on average from 1984 to 1986.
From 1987 to 1990, investors valued $1 of PRB payment as an average of $13.75 in obligations.
Present-value estimates of the PRB obligation were found to be value-relevant to investors.

Cite This Study

Eli Amir (1993) studied this question.

synapsesocial.com/papers/69ba42cf4e9516ffd37a3577 https://doi.org/10.2308/tar-9403090140

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Implication

Ex ante evaluation finds investors underestimate the impact of postretirement benefits on firm value, suggesting implications for regulatory accounting.

The Market Valuation of Accounting Information: The Case of Postretirement Benefits other than Pensions.

Discussion

Member takes

Implication

Key Points

Cite This Study

The Market Valuation of Accounting Information: The Case of Postretirement Benefits other than Pensions.

Discussion

Member takes

Implication

Key Points

Cite This Study

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