Accounting and Finance 39 (1999) 205 ± 228 The value relevance of superannuation disclosures by Australian-listed firms sponsoring defined benefit plans Nicole Ang a , Gerry Gallery b , Baljit K. Sidhu c a School of Accounting, University of New South Wales, Sydney, NSW 2052. b School of Business, Bond University, Gold Coast, QLD 4229 c Australian Graduate School of Management, University of New South Wales, Sydney, NSW 2052 Abstract This paper investigates the value relevance of (employer sponsored defined benefit plan) superannuation disclosures required by AASB 1028. It addresses the competing claims by standard setters and lobbyists that such disclosures would (not) enhance the relevance and reliability of financial statements. It presents three principal findings. First, disclosed superannuation information is value relevant in the industrial sector, where these items tend to be material. Second, the market weights on the required disclosures are typically higher than those on recognised assets and liabilities. Third, and in contrast to the findings in similar US studies, accrued benefits do not have higher explanatory power relative to vested benefits. Key words: Capital markets; Value relevance; Superannuation JEL classification: G14; M41 1. Introduction Attempts to regulate accounting for superannuation plans have been controversial both in Australia and in overseas jurisdictions. The Australian exposure draft ED 53 Accounting for Employee Entitlements, issued in August 1991, represented the first attempt by Australian standard-setters to mandate disclosure and recognition requirements for employers' superannuation obligations. 1 Its # AAANZ, 1999. Published by Blackwell Publishers, 108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden MA 02148, USA. We especially thank Natalie Gallery, Jilnaught Wong (the editor) and two anonymous reviewers for many helpful suggestions. We also received constructive comment from Tony Abrahams, Janice Loftus (discussant) and participants at the 1997 AAANZ conference, and Bob Swieringa. Anusha Kangatharan provided research assistance. B.K. Sidhu acknowledges financial support from an Australian Research Council small grant. 1 A release of an exposure draft in 1978 failed to develop beyond the private circulation stage (see Lambert and Gallery, 1996).