Only two out of a random sample of 50 FTSE 250 companies have already implemented FRS 17, while one other has plans to adopt it this year, according to a survey by PricewaterhouseCoopers.

Balance sheet volatility caused by FRS 17

Of the 39 companies polled with defined benefit schemes, 70% were in deficit. Had those companies reported under FRS 17 in full their net assets would have been reduced by up to 14%.

Peter Holgate, UK senior technical partner at PwC, said: 'Companies are not rushing to adopt FRS 17 early. This result is not a surprise given the publicity surrounding the standard and the potential impact on net assets and gearing. Furthermore, there is so much uncertainty over the future of accounting for pensions costs, both in the UK and internationally, that a policy of "wait and see" seems sensible.'

The findings support the decision by the Accounting Standards Board to defer its implementation until 2005 when it hopes the global standard setter, the IASB, will have completed work on its own accounting standard.

Currently listed UK companies must only disclose their pension fund deficit or surplus. Under FRS 17 they will have to book the figures in the profit and loss account increasing volatility to their accounts.