Businesses saved by FRS 17

Link: More on FRS17

The statement comes as Sir David Tweedie, chairman of the IASB, told critics of FRS17 that the international standard – coming into effect from 2005 – will be similar, ‘if not better’.

As it stands, the international pensions accounting rule allows for the smoothing of any shortfalls or excesses over a number of years avoiding volatility on the balance sheet.

FRS17, requires companies to adjust valuations annually and show them in the accounts.

But this week Tweedie gave the first indication that the international rule could mirror FRS17. ‘None of the board are smoothers,’ he said.

John Pierce, chief executive of the Quoted Companies Alliance and a staunch critic of the UK rule, said: ‘To adjust annually – on questionable valuation bases – is lacking the common sense that has come to our rescue. There is enough volatility around without artificially creating more.’

Many of Britain’s largest employers have new closed final salary schemes.

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