UK - The Accounting Standards Board is softening its line on the controversial new accounting standard FRS17.
The move follows a meeting between ASB chairman Mary Keegan and technical director Allan Cook with work and pensions secretary Alistair Darling to discuss the implications of the FRS17 and why it differed from international accounting standards.
The ASB denies it has bowed to political and industry pressure which has been mounting as the impact of FRS17 on companies - and their pension funds - becomes increasingly apparent.
But the move represents a radical shift from the ASB’s uncompromising stance in December.
Speaking after the meeting with the ASB, Darling was damning about the panic caused by FRS17.
Darling was reported as saying: “You should never ever just take a snapshot on one particular day and say the company is good or bad.”
Agreement between the ASB and Darling was also reached on the need for pension surpluses and deficits not to be looked at “in the round”.
Over the coming year the ASB is to look at ways of converging FRS17 with the rules of the International Accounting Standards Board with particular reference to reporting of pension deficits and surpluses.
Cook said: “The difference is on how you deal with the surplus or deficit - we propose to recognise it instantly in the statement of recognised gains and losses; IASB defers and amortises it over a period of 10-15 years.”
He added: “We are looking at either moving towards the present international standard or whether the present international standard will move to us.”
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