Journal article

Human capital, pension information and firm valuation

Y Li, TW Scott

International Journal of Accounting, Auditing and Performance Evaluation | Published : 2015


We demonstrate that the reported pension information in the notes to financial statements captures human capital, in addition to the compensation expense and accounting assets/liabilities information that it is purported to represent. In explaining prices (returns), we document that the service cost for defined benefit pension firms and the pension cost for defined contribution pension firms have consistently positive coefficients that can be attributed to capturing the sustainability (growth) of human capital. This finding confirms the existence of service cost anomaly and extends to pension cost for defined contribution plans. The human capital hypothesis is supported by the finding that t..

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University of Melbourne Researchers