RegulationAccounting StandardsGlobal accounting standard to wipe £10bn off pensions’ profits

Global accounting standard to wipe £10bn off pensions' profits

Favours reporting income and interest over expected returns

A NEW International Financial Reporting Standard could see UK pensions’ reported profits reduced by as much as £10bn.

The revised IAS 19, due to be published this month and applicable to accounts from 2014 onwards, will improve transparency and comparability in pensions reporting, KPMG claimed.

Profits will drop due to a move from subjective expected returns on assets credit to income with interest on the plan assets at the AA discount rate.

Mike Smedley, pensions partner at KPMG in the UK, said: “Our survey paints a relatively rosy picture for UK pensions this year … [but] it is unclear how long these benign conditions may continue.

“The new IAS19, due later this month, might also start to change companies’ views; some may reduce investment risk to coincide with the removal of the P&L credit for asset returns.”

Related Articles

Sports Direct implements FRC corrections in annual reporting

Accounting Standards Sports Direct implements FRC corrections in annual reporting

1y Stephanie Wix, Writer
Former CFO joins IASB board

Accounting Standards Former CFO joins IASB board

1y Stephanie Wix, Writer
Cashflow statement improvements targeted by watchdog

Accounting Standards Cashflow statement improvements targeted by watchdog

1y Stephanie Wix, Writer
FRC expects Brexit narrative within annual reports

Accounting Standards FRC expects Brexit narrative within annual reports

1y Stephanie Wix, Writer
FRC consults on approach to updating FRS 102 for changes in IFRS

Accounting Standards FRC consults on approach to updating FRS 102 for changes in IFRS

1y Richard Crump, Writer
IASB issues amendments to insurance contracts standard

Accounting Standards IASB issues amendments to insurance contracts standard

1y Richard Crump, Writer
LAPFF urges FTSE 350 companies to disregard the FRC

Accounting Standards LAPFF urges FTSE 350 companies to disregard the FRC

1y Richard Crump, Writer
FRC proposes changes to FRS 101

Accounting Standards FRC proposes changes to FRS 101

1y Richard Crump, Writer