It has published the results of a survey as the consultation period for responding to the ASB’s proposals in the draft standard ‘FRED 20’ draws to a close at the end of this week.
Drawing on questionnaire responses from nearly 200 participants from across the country, Bacon & Woodrow’s survey found that
93% of respondents are concerned about the increase in volatility in the profit & loss account arising from the proposed ASB standard, while 89% are concerned about the large and fluctuating amounts which will appear in the company balance sheet.
20% of companies think that the new accounting standard is likely to cause them to make a change to their pension scheme.
14% of respondents said that the proposals would lead them to alter the pension scheme investment strategy in order to stabilise reported pension costs. 68% of companies would accept an increase in cost of 1% of pay if pension costs could be stabilised, although this drops to 42% of companies if the increase in cost was to be 3% of pay.
Raj Mody, senior consultant and actuary at Bacon & Woodrow warned: ‘It’s a worry that companies are so alarmed by the proposals that 20% of them would actually change their pension scheme because of an accounting standard. This is letting the tail wag the dog and the results suggest that the ASB needs to do more to investigate the reaction of analysts and shareholders to the new rules. This may help reassure companies before the revised standard is implemented.’
Andrew Tyrie airs views on the Finance Bill, 'Making Tax Policy Better' report, and Brexit
In our latest managing partner Q&A looking towards 2017, CVR Global's Richard Toone talks about recruitment, and the potential threat of competition from the legal sector, as key issues for the firm in the coming year
Deloitte to avoid tendering for government contracts over the next six months, to appease Theresa May following consultant's report that painted a less-than-flattering picture of Brexit plans
In our first Q&A looking towards 2017, Menzies senior partner Julie Adams flags up increasing digitisation, aligned with more hands-on consultative services, as the key mix for her practice