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Pension Cost Accounting
Background
The existence of accounting standards for reporting pension costs, such as
SSAP24 and FAS87 (in the USA), established the need for expert and timely
actuarial advice. With the introduction of the new requirements of FRS17 and
wider application of the international accounting standard IAS19, a full
understanding of the bottom line implications becomes even more vital.
Similarly, the new approaches to reporting directors’ pensions introduced in
recent years has raised the prominence of this aspect of directors’ remuneration
in the public eye, bringing boardroom focus onto the role and expertise of the
actuary. Key Issues:
What is the impact on your bottom line and balance sheet of varying the main assumptions used for pension costing accounting? What are the potential consequences for companies' figures of the immediate recognition of actuarial gains/losses? How should you allow for major external events, such as tax changes? What is the practice amongst your peer group? What are the implications of the assumptions used for accounting being different from those used for funding? How do you account for pension scheme surpluses or deficits in acquisitions? How should pension benefits for directors be calculated and disclosed?
What we can do to assist you:
Prepare pension cost accounting figures in full compliance with current national or international accounting standards Advise on the impact on bottom line and balance sheet of varying the main assumptions Assess the risk to the business of volatility in pension costs and balance sheet figures Advise on fair value accounting for acquisitions/disposals Advise on peer group practice Prepare full disclosures of directors’ pensions in accordance with Stock Exchange listing rules and Companies Act requirements.
What the results would be:
Access to expert and timely advice on all your pension-related accounting issues Enhanced understanding of the processes and options available in reporting pension costs Knowledge of peer group practice Compliance with all statutory and quasi-statutory disclosure requirements.
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