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With the bankruptcy of Enron and the accompanying loss of pension benefits of its employees, pensions have recently received significant press. Accounting for pension plan obligations, for defined benefit plans in particular, requires companies to make assumptions regarding discount rates, projected salary increases, and expected long‐term return on plan assets. Such assumptions, in turn, determine the funding status of the pension plan and the annual pension expense. Higher assumed discount rates reduce the pension obligation, enhance the funding status of the plan, and reduce any lump‐sum payments. Higher expected return on assets reduces the current pension expense. This study investigates the relationship between pension plan assumptions and the funding status of a pension plan. The results reveal that companies with pension plans that are more fully funded assume higher discount rates and expected long‐term return on assets than do companies with less funded plans. The effect of these assumptions is that higher discount rate assumptions lead to better funding status, and higher expected long‐term rates of return on assets partially offset the pension expense impacts of these higher discount rate assumptions. We are doubtful that more funded plans collectively should be assuming higher discount rates and expected long‐term return on plan assets, especially since the actual return on plan assets investigated did not correlate with these assumptions.

Liabilities associated with environmental matters have become a major concern worldwide. Clearly, environmental impact must be a major element of a corporation’s decision process and should be timely reported in its financial statements. The SEC intensely reviews the adequacy of the environmental disclosures of its registrants. This review covers both required environmental disclosures and the adequacy of financial disclosures ingeneral. Despite this scrutiny, SEC Commissioner Roberts believes that accruals of environmental liabilities do not appear in financial statements quickly enough.This study reviewed the annual report environmental disclosures of 645 Forbes 500 firms. The study results revealed that the majority of firms provide no disclosure of environmental issues. The environmental disclosures that are included tend to be limited in terms of their informational content. It is also apparent that certain industries are more likely to include environmental disclosures than are other industries. Given the enormous impact of environmental cleanup costs to companies, the authors suggest that certain environmental issues be disclosed by all firms regardless of industry affiliation.

The Financial Accounting Standards Board (FASB) has recently issued Statement of Financial Accounting Standards, (SFAS) No. 130, Reporting Comprehensive Income. That Statement requires companies to report a comprehensive income measure, which includes net income and net‐of‐tax adjustments for changes in unrealized gains/losses on securities, foreign currency gain/loss adjustments, and minimum pension liability adjustments.These latter adjustments were previously reported directly in the stockholders’ equity section of the statement of financial position. This paper analyzes the effects of comprehensive income disclosures for 100 randomly selected Fortune 500 companies. Comprehensive income was computed for these companies and compared with re‐ported net income to determine the number and significance of these other comprehensive income adjustments.The results indicate that a large number of firms may report a comprehensive income amount different from reported net income. Although these differences may be significant for some firms, the majority of these adjustments will not cause comprehensive income to be materially different from reported net income for most firms.

The objective of this paper is to analyze the lobbying activities of the Financial Accounting Standards Board’s (FASB) constituents to the Exposure Draft of Statement 106, “Employer’s Accounting For Postretirement Benefits Other Than Pensions.” Specifically, the association between the provisions which changed between the Exposure Draft and Statement 106 and the comments received in the 477 comment letters was investigated. The results indicate that the four issues (out of 21 issues) that were modified in whole or in part were strongly opposed by the majority (90%: or greater) of respondents. None of the issues favored by respondents were modified. Opinions among respondent types (industrialists, actuaries, public accountants, insurance representatives, and other), while generally quite similar, did vary on certain issues. Since the FASB did modify issues strongly opposed by respondents, the results provide some faith in FASB’s due process procedure and should encourage constituents to participate in future FASB decisions.

Volume 25 celebrates the 25th year of publication for the American Journal of Business (AJB). Launched by eight MAC schools of business in March 1986, the Journal has featured more than 700 authors who have contributed more than 330 research articles at the intersection of theory and practice. From accounting to marketing, management to finance, the Journal prominently covers the breadth of the business disciplines as a general business outlet intended for both practitioners and academics. As the Journal reaches out beyond the MAC in sponsorship, authorship, and readership, we assess the Journal’s first quarter century of impact.