PracticeConsultingUK plc faces pensions chaos

UK plc faces pensions chaos

Listed companies, already under fire for inadequate pensions disclosure, face increased confusion unless the UK can win over the global accounting standard-setters.

Experts warned this week that UK directors, already struggling to comply with the controversial new British pensions standard FRS17 by a 2003 deadline, face the imposition of a new set of international rules just two years later.

Brussels has demanded all listed European companies switch to international standards by 2005. And unless international standard-setters can be convinced to follow the British model on pensions accounting by this time, British finance directors face yet another set of significant changes in this complex area.

The main difference at present is that, under the new UK standard, businesses have to show pension funds gains and losses as they occur, whereas under international rules, they can spread them out over time.

The controversy surrounding pensions accounting was highlighted earlier this month as a firm of actuaries, Lane, Clark & Peacock, disparaged some of the UK’s leading FTSE companies for below average pensions disclosure.

One of the companies named and shamed was BAT, whose non-executive director is Kenneth Clarke, a contender in the Conservative Party?s leadership contest.

The company said: ‘We are surprised to be highlighted given the documents we disclosed.’

The actuarial firm’s report also looked at the way such companies will be hit by the new British accountancy standard.

Although most are aware of this, and the significant impact it could have on their balance sheets and reported profits, few are aware of the further changes that could be required after they get to grips with FRS17.

John Ralph, pensions expert at Boots, said there ‘will be a huge job of education’ for external understanding of pension results.

Standard-setters are, however, working on harmonisation between British and international standards. Allan Cook, technical director at the UK Accounting Standards Board, said: ‘We are reluctant to have them [UK companies] go through that process. We are trying to get the IASB on side.’

Links

Pensions disclosure still inadequate

Rise in pension scheme under-funding

Watchdog warns over actuaries

Related Articles

5 tips for SMEs to protect cash flow

Accounting Software 5 tips for SMEs to protect cash flow

5m Alia Shoaib, Reporter
Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

Consulting Tyrie on Finance Bill 2017: ‘Making Tax Policy Better’

11m Stephanie Wix, Writer
Managing partner Q&A - the year ahead: Richard Toone, CVR Global

Accounting Firms Managing partner Q&A - the year ahead: Richard Toone, CVR Global

12m Kevin Reed, Writer
Deloitte 'self-imposes exile' on government contracts to defuse PM row

Accounting Firms Deloitte 'self-imposes exile' on government contracts to defuse PM row

12m Kevin Reed, Writer
Managing partner Q&A - the year ahead: Julie Adams, Menzies

Accounting Firms Managing partner Q&A - the year ahead: Julie Adams, Menzies

12m Kevin Reed, Writer
Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

Business Regulation Friday Afternoon Live: Deloitte's tech thing; PAC wants HMRC 'contingencies'; and Sports Direct

1y Kevin Reed, Writer
Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

Audit Friday Afternoon Live: HMRC complaints rise; Deloitte scoops big audits; and corporate reporting woes

1y Kevin Reed, Writer
New head of equity capital markets for KPMG

Accounting Firms New head of equity capital markets for KPMG

1y Stephanie Wix, Writer