Abstracts » Business

Pension costs - practical help please

Article Abstract:

Very little guidance on choice of actuarial method and assumptions for use in pension costs accounting is provided by Statement of Standard Accounting Practices 24 (SSAP 24), Accounting for Pension Costs. To address the problem, a working party of the Pensions Research Accountants Group (PRAG) is working on a paper for submission to the Accounting Standards Board on reforming SSAP 24, and is seeking comments on the matter. The most critical issue lies in whether the actuarial techniques used for SSAP 24 calculations and the amortization of variations should be further standardized. This issue stems from the availability of varying actuarial methods, none of which, however, meets all the requirements of SSAP 24. Mixing such methods with economic and demographic assumptions can result in counter-intuitiveness.

Accounting and auditing, Pensions, Accounting Standards Board

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Farewell to cash accounting

Article Abstract:

The Accounting Standards Committee has issued Standard Statement of Accounting Practices 24, Accounting for Pension Costs. Pension cost accounting had been one of the last areas of cash accounting instead of accruals accounting. SSAP 24 has changed the practices so that the charge against profits should be the amount of contributions payable to the pension scheme in respect of the accounting period for defined contribution schemes.

Standards, United Kingdom, Accounting, Cash basis accounting, Great Britain, Accounting Standards Committee

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