Current Issues in Pensions Financial Reporting – 30 June 2020

This note is for those who will be involved in preparing and auditing pension disclosure under Accounting Standards FRS102 (UK non-listed), IAS19 (EU listed) and ASC715 (US listed) as at 30 June 2020.  We look at the current topical issues as well as the considerations for company directors when setting assumptions, and for auditors in determining whether the assumptions are appropriate.

Our latest current issues in pensions financial reporting newsletter looks at the current topical issues, including the impact of Covid-19 has had on IAS19 funding positions for pension schemes.  We also explore the developments in setting the financial and demographic assumptions used for accounting disclosures, which can have a significant impact on the accounting figures.

There are a number of areas where auditors might look to get more involved than usual this year, so it’s important that companies are getting robust advice to give their auditors the justification they need. 

Here are some of the key areas tackled in this report:

  • Accounting positions at 30 June 2020 will be materially worse than at the previous quarter end due to falling corporate bond yields
  • However, for companies with year-end 30 June the picture is mixed compared to a year earlier. Mature schemes’ funding levels will have held up fairly well, but immature schemes could see a significant increase in deficit. Similar comments apply to companies with 31 December year end reporting half year results at 30 June
  • The excess deaths experience by the UK during Covid-19 pandemic is unlikely to have had a significant impact on pension liabilities (so far) but will be an important consideration when setting mortality assumptions going forward
  • And much more…

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Stay up to date by reading our latest Current Issues in Pensions Financial Report.