Abstract
This study investigates whether interim reports have become more value relevant subsequent to SFAS 132R. An increase in value relevance of interim reports is indicated by a significant increase in the earnings valuation coefficient in the post-SFAS 132R period. Our results suggest that SFAS 132R enhances the value relevance of interim reports. More specifically, the disclosures of periodic pension cost and its components, mandated by SFAS 132R, are shown to provide incremental value relevant information in the interim financial reports. Evidence is also presented supporting the claim that these interim disclosures have benefited the small, less resourceful investors; and that the information asymmetry pertaining to pension data between small and large investors has been reduced as a consequence of SFAS 132R. These findings are of interest to the FASB and SEC; especially since SFAS 132R was promulgated against opposition that was claiming that such disclosures would be meaningless and confusing.