Financial Reporting Council Releases Exposure Draft Containing Amendments
The Financial Reporting Council has released an exposure related draft containing restricted scope amendments to the proposed accounting standard draft Financial Reporting Standard 102, the standard which is applicable in the United Kingdom and the Republic of Ireland. The draft points out two amendments pertaining to multiple employer defined advantage pension related plans as well as grantors of service concessions arrangements.
The amendment pertaining to multiple employer pension plans is related to accounting in particular situations when an agreement for funding a deficit in multiple employer pension programme exists. The FRC has proposed this in view of the evidence related to diversity in practice in the Financial Reporting Standards 17 Retirement benefits.
While designing the amendment that has been proposed the Financial Reporting Council also noted that the existing demands of paragraph Financial Reporting Standard seventeen paragraph nine (b) (v), needs disclosure of some implications for the employer of a deficit in case of multiple employer plan.
Organizations participating in multiple employer defined benefit plans will have to give a lot of thought to compliance in view of this particular requirement/need wherein the organizations have given a nod to a schedule of funding in case of a deficit. This amendment is only going to have an impact on few organizations that follow United Kingdom financial accounting principles/standards.
The 2nd amendment is related to accounting by the grantors, with regard to service concessions arrangements. This particular amendment has been proposed in view of the feedback received from the respondents and lays down the proposed accounting related demands of the grantors.
The Financial Reporting Council is anticipating finalizing of the draft Financial Reporting Standards at the beginning of 2013 and the FRC wants the draft to come into effect for financial accounting sessions starting after or on 1st of January 2015.
The comments with regard to the amendments that have been proposed can be given over a period of sixty days, ending on 3rd December in 2012.
Roger Marshall, Chairman of the accounting council stated that the amendments that have been proposed will minimize diversity in financial accounting related practice. He also stated that the grantors are now going to have crisp and clear standards on the basis of which they will be able to account for such type of arrangements.
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