PRESENTATION OF RETIREMENT BENEFITS EXPENSE AND EARNINGS ATTRIBUTES: EVIDENCE FROM JAPAN

This research examines how the amendment of retirement benefits accounting affects earnings attributes and corporate management of Japanese companies. The results show that the existing net income before taxes is more persistent, predictable, smoothed, and value relevant, while that the approach 1 income that recommended by the International Accounting Standards Boards (IASB) is more timely. I suppose that the earnings attributes of persistency, predictability, and smoothness are suitable for the Japanese corporate system. This research suggests that Japanese companies possibly shift the organization-oriented corporate system to the market-oriented corporate system, if the ASB of Japan (ASBJ) adopt the presentation of the approach 1 income that is recommended by the IASB (2008). So they may have severe impacts on their corporate system or employment system because they will make it difficult to maintain the long-termrelationship between other stakeholders, which is the source of competitiveness.