CBI rails against FRS 17
The Confederation of British Industry has written to the Accounting Standards Board attacking the new controversial pensions accounting standard.
FRS 17 has been blamed by leading UK retailers and business representatives for the spiralling closure of traditional final salary pension schemes.
The CBI has consistently expressed its concerns over the new standard that will take full effect in June but growing governmental worries about the effects of the accounting rule has prompted the body to take further action.
Digby Jones, CBI director-general, wrote: ‘FRS 17 introduces a high degree of volatility into the accounts of companies [offering] defined benefits pension schemes. Companies have expressed concern that this volatility is having serious adverse effects on their business competitiveness,’ according to news reports.
FRS 17 requires companies to show the true cost of funding pension schemes by booking the assets and liabilities in the accounts.
The CBI has added to a growing number of critics of the standard who are demanding a move over to the international accounting rule which allows a schemes’ assets and liabilities to be smoothed out over years.