SPONSORS OF CORPORATE PENSION SCHEMES are heading for significant hikes in their reported pension costs for 2013, Xafinity Consulting has said.
The increase will come as balance sheet deficits hit £576bn and new accounting requirements concerning employee benefits under the IFRS come into force.
New IAS19 requirements will now bring attention onto the size of pension costs against corporate profits.
Hugh Creasy, director at Xafinity Corporate Solutions, said: “The key tool in managing the size of these pension costs has been the expected return on assets. IAS19 is about to do away with this. Bringing together flat asset values and such a low corporate bond yield will be the worst of circumstances for the finance director. With gilt yields down at 2% and corporate bond yields heading back towards them, the outlook for 31 December is sombre.
“This will come as disappointing news for finance directors who have seen their scheme asset values hold firm. Now is the time to make plans to manage this before we hit the usual hectic activity at the turn of the year.”
The FRC is inviting comments from stakeholders on its proposed approach to updating FRS 102 to reflect changes in IFRS
Board members of accounting standard setter the IASB have come under fire for the size of their remuneration packages amid scrutiny of how the organisation is governed
The IASB has issued amendments to its existing insurance contracts accounting standard, IFRS 4
The UK’s largest listed companies should disregard the accounting advice of reporting watchdog the FRC, a group of investors have urged chairmen of FTSE 350 businesses