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The Actuary The magazine of the Institute & Faculty of Actuaries
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Standing firm on pension values

In a 2008 discussion paper, the Accounting Standards Board (ASB) said that the discount rate used to calculate pension scheme liabilities should move to a risk-free rate which reflects the time value of money. In its latest report, the ASB said it believed users of financial statements were better served by disclosures regarding the risk rather than through adjustment of the underlying liability.

ASB chairman, Ian Mackintosh, said: “This report sets out the ASB’s views following redeliberations and I believe provides the International Accounting Standards Board (IASB) with valuable material for consideration in its current short-term project and for the longerterm fundamental review of the financial reporting of pensions.” It seems, however, that unless the IASB were to move in the same direction, there is unlikely to be any change in practice in the near future.