FRS17 On or After 06/04/07 Employees Benefit Obligation Note

Introduction

FRS 17 sets out the accounting treatment for retirement benefits such as pensions and medical care during retirement. In December 2006 the ASB issued an amendment to FRS 17 which amends the disclosure requirement set out in the FRS.

The requirements of FRS 17, following a long transition period, are effective for accounting periods beginning on or after 1 January 2005. The requirements of the Amendment issued in December 2006, are effective for accounting periods beginning on or after 6 April 2007. Early adoption is encouraged.

Disclosure of Retirement Benefits (FRS17) for periods starting on or after 06/04/07 can be generated as follows:

FRS17 - Employee Benefit Obligations

• Please refer to example within the Appendix below.

To set the type of scheme select: Edit | Data Screens | Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Selection

Defined Benefit

Postings should be made to accounts 957, 959, 960 & 961.

Data Screen: Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations

Defined Contribution

There is no standard text for a Defined Contribution scheme.

Data Screen: Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Defined Contribution Schemes

FRSSE - Pension Commitments

• Please refer to the ‘FRS17 Pre 06/04/07 and FRSSE – Defined Benefit Scheme’ guide for further reference.

To set the type of scheme select: Edit | Data Screens | Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRSSE | Pension Schemes

Defined Benefit

Postings: Accounts 958, 959 & 961 (inc 438 & 439 – Other financial income)

Data Screen: Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRSSE | Defined Benefit Schemes

Defined Contribution

There is no standard text for a Defined Contribution scheme.

Data Screen: Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRSSE | Defined Contribution Schemes

Appendix

• This example has been provided as a guide for clients following FRS17 periods starting on or after 06/04/07.
  
  The figures shown are NOT accurate, consistent or used as a ‘real life’ example.
  
  For an example of this kind please refer to (amendment to) FRS17 itself.

For illustration purposes this example will only indicate where a Posting or Data Screen entry will appear on the Employee Benefit Obligations note.

Example

Postings have been made to accounts:

• 957/1-45 (Pension Asset)

• 959 (Pension – Deferred Tax)

• 960/1-45 (Retirement Healthcare Benefit)

• 961 (RHB – Deferred Tax)

An amount has been posted to correspond to the account posted to:

Data Screens - Information has been entered within all Employee Benefit Obligations Data Screens. This text has been marked *** below.

Where the table shows £123 (or £120) and xx% an entry has been made within the Data Screens.

Account Descriptions have been changed on each account (the account number has been added to the original description).

This will indicate what description needs to be changed to affect the note (Edit | Account Description)

• If a description does not show an account number as a suffix then it is likely that this description cannot be changed.

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EMPLOYEE BENEFIT OBLIGATIONS

*** Opening Paragraph

Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Opening Paragraph (text entered within this screen will appear here).

Information entered within these data screens will only appear for Defined Benefit Schemes with accounting periods starting on or after 6 April 2007 and if FRSSE does not apply.

Early adoption is encouraged and can be selected via the data screen Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Selections

The data screens Year Start On or After 6.4.07 | FRS17 will then become available and disclosure as per Final Phase of FRS17 will be shown on the reports.

The amounts recognised in the balance sheet are as follows:

Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Amounts in Scheme Assets - Entity | Text (text entered within this screen will appear here) Shows below Amounts recognised in Balance Sheet table.

Funded | Unfunded

Postings made to account 957 (Defined Benefit Pension Plans) will be shown as Funded as default.  Postings made to account 960 (Retirement Healthcare Benefits) will be shows as Unfunded.

The data screen Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Amounts Recognised | Balance Sheet can be used to adjust the totals of Funded and Unfunded balances for each of these accounts.

The amounts recognised in profit or loss are as follows:

Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Amounts Recognised | Profit or Loss | Additional text (text entered within this screen will appear here)

• The total shown for Past Service Cost equals the balance posted to accounts 957/3 (DB) & 960/3 (RHB) and the movement on account 957/41 (DB) & 960/41 (RHB) respectively.

Changes in the present value of the defined benefit obligation are as follows:

Changes in the fair value of scheme assets are as follows:

The amounts recognised in the statement of recognised gains and losses are as follows:

The major categories of scheme assets as a percentage of total scheme assets are as follows:

Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Major Categories | Additional text (text entered within this screen will appear here).

Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Principle Actuarial Assumptions | Additional text (text entered within this screen will appear here).

Assumed healthcare cost trend rates have a significant effect on the amounts recognised in profit or loss.  A one percentage point change in assumed healthcare cost trend rates would have the following effects:

Amounts for the current and previous two periods are as follows:

Notes to Financial Statements | Other Disclosures | Retirement Benefits | Year Start On or After 6.4.07 | FRS17 | Employee Benefit Obligations | Additional/Replacement Note (text entered within this screen will appear here).

Text entered here will appear at the end of the Employee Benefit Obligations Note if a Defined Benefit scheme and period starts on or after 06/04/07.

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