FRS 17 may be less stringent than global rule

Work on updating IAS 19, the international pensions rule, began last month leading to a proposal by the UK’s Accounting Standards Board to delay adoption of FRS 17 until the global standard setter had completed its work.

But, actuaries at Lane, Clark & Peacock say this could be the ‘first nail in the coffin of the FRS 17 approach’.

Alex Waite, actuary at LC&P, said: ‘It remains possible that simply reporting market values in the notes to accounts will be sufficient to keep the accounting purists happy, and the actual balance sheet figures themselves will not have to be set to a volatile market value at each accounting date.’

‘Will the “mark to market” methodology gain acceptance internationally when it has failed to be adopted in the UK?,’ questioned Waite.

The move has been viewed by many as a climb-down by the ASB. But, Mary Keegan, head of the ASB, stands firm that FRS 17 is the right way forward.

Keegan said: ‘The Board has confirmed that it considers the requirements of FRS 17 to be superior to those of the present international standard.’ said Mary Keegan. ‘We continue to encourage companies to consider voluntarily adopting its requirements in full.’

FRS 17 requires companies to show pension schemes assets and liabilities at fair value on the balance sheet ? a radical move away from the traditional method of smoothing figures over a number of years. IAS 19 requires disclosure to the notes only.

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