BP reports pension shortfall
BP has today joined other leading FTSE-100 companies to disclose large pension liabilities under the new accounting standard.
According to BP’s accounts, the present value of scheme liabilities in the UK are £8.9m. The group said it had no plans to transfer its pensions schemes out of equities, nor did it make any contributions to its schemes in 2001.
Mike Starkie, BP’s chief accountant, told AccountancyAge.com: ‘FRS 17 undoubtedly does provide a lot more information about overall pensions information. But, information has to be interpreted in a sensible way by users of the accounts.’
He also denied media reports that the company blamed FRS 17 for the company’s pensions liabilities.
‘We are supporters of transparency in financial reporting. We’ve made the transistional disclosures this year and are happy to go forward from 2003.’
At present companies only have to disclose in the notes to the accounts the cost of funding pension schemes. From June 2003 companies will have to start booking the figures in the accounts, which will lead to increased volatility; a move company directors are fiercely against.