Date of Award


Document Type


Degree Name

Doctor of Philosophy (PhD)



First Advisor

Donald R. Deis


The purpose of this research was to examine the factors which motivated managers' choices of transition method for the adoption of Statement of Financial Accounting Standards No. 106 (SFAS 106), Employers' Accounting for Postretirement Benefits Other Than Pensions. This statement allowed employers the option of recognizing the entire transition amount in the year of adoption or amortizing it over a future period. Many opponents of this statement had expressed concern that the large financial impact brought about by recognizing this obligation would cause managers to seek ways to minimize the effect, possibly at the expense of plan participants. Since managers had the opportunity to make a choice of how to recognize this obligation, there existed a possibility that managers could use the adoption of SFAS 106 in attempt to justify plan changes. Thus, the primary question of interest in this research was: "Is there a significant relationship between plan amendments and transition method choice?". In this research, several variables which were specific to the issue of postretirement benefits (a ratio measuring maturity of a firm's workforce, the size of the transition obligation, concurrent adoption of SFAS 109, and the announcement of plan amendments) were examined along with some of the more traditional firm specific variables which have previously been shown to influence decisions made by managers. A sample of 196 firms collected from COMPUSTAT and NAARS data bases was used and eight hypotheses were tested using both univariate analysis and logistic regression models. Five variables were shown to be significant to the choice of transition method choices: bonus plan, early adoption, industry regulation, maturity of a firm's workforce, and concurrent adoption of SFAS 109. There was no evidence that the announcement of plan amendments was significant to the transition method choice, thus contradicting the theory that firms would use the adoption of SFAS 106 to justify plan amendments.