This study investigates the measures of pension assets and liabilities disclosed under SFAS 87 to determine which most closely reflect those that investors implicitly assess when they value the firm. Several measures considered to have conceptual merit are disclosed under SFAS 87, but no single method has been deemed most appropriate. The attributes of the three asset and five liability measurement alternatives disclosed and the controversies surrounding the FASB’s deliberations on these alternatives are considered in the research design. Because the pension asset and liability issues in SFAS 87 relate to measurement and reflect a variety of unresolved questions, an approach directly comparing measurement error across alternatives is used. The research design utilizes relevance and reliability, two primary accounting choice characteristics advanced by the FASB. These two attributes are operationalized by the variances and levels of differences between alternative measures and the implied investors’ assessment. In most prior studies using cross-sectional valuation to address a variety of research questions, a model is posited and then tested by using book values as substitutes for unobservable variables. The measurement error is considered an econometric problem. Although the valuation equation assumed here is also based on unobservable market values, the measurement error is modeled, and the impact of the measurement error covariance structure on the bias in estimated regression coefficients is a fundamental research design feature. In prior research, this covariance structure is often either assumed to be zero (i.e., the error is “white noise”) or left unspecified. The model is based on the attributes of historical costs for the differences between market values and book value amounts, including the candidate pension alternatives. With appropriate assumptions, a technique that exploits the implications of measurement errors in cross-sectional regression is used to compare levels of measurement error rather than purge or ignore it. Although several measures of pension assets and liabilities are found to be significant in explaining firm market value, differences among the alternatives are also significant. The fair value of plan assets and the accumulated benefit obligation each exhibit less measurement error than other alternatives for the entire sample. The projected benefit obligation has less measurement error variance for subsamples in which the salary progression rate includes expected inflation and productivity changes. These findings suggest that (1) footnote disclosures are closer to those assessed in market valuations than are the measures recognized in the balance sheet and (2) investors appear to include expectations about future salary progression in assessing pension liabilities, but view the projected benefit obligation measure as noisy.