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[/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off”][et_pb_row admin_label=”Row”][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”http://www.frs102.com/members/premium-toolkit/” type=”big” color=”red”] Return to Main Index[/button] [/et_pb_text][/et_pb_column][et_pb_column type=”1_2″][et_pb_text admin_label=”Text” background_layout=”light” text_orientation=”center” text_font_size=”14″ use_border_color=”off” border_color=”#ffffff” border_style=”solid”] [button link=”https://uk.frs102.com/members/premium-toolkit/section-34/” type=”big” color=”red”] Return to Section 34 Home[/button] [/et_pb_text][/et_pb_column][/et_pb_row][/et_pb_section][et_pb_section admin_label=”Section” fullwidth=”off” specialty=”off” transparent_background=”off” allow_player_pause=”off” inner_shadow=”off” parallax=”off” parallax_method=”off” padding_mobile=”off” make_fullwidth=”off” use_custom_width=”off” width_unit=”on” make_equal=”off” use_custom_gutter=”off” gutter_width=”3″][et_pb_row admin_label=”Row”][et_pb_column type=”4_4″][et_pb_text admin_label=”Main Body Text” background_layout=”light” text_orientation=”justified” use_border_color=”off” border_color=”#ffffff” border_style=”solid”]Retirement Benefit Plans: Financial Statements
Extract from FRS102: Section 34.34-.34.48
34.34 An entity applying this FRS that is a retirement benefit plan shall also apply the requirements of paragraphs 34.35 to 34.48. A retirement benefit plan may be a defined benefit plan, a defined contribution plan, or have both defined benefit and defined contribution elements. The financial statements shall distinguish between defined benefit and defined contribution elements, where material.
Requirements applicable to both defined benefit plans and defined contribution plans
34.35 A retirement benefit plan need not comply with the requirements of paragraph 3.17.The financial statements of a retirement benefit plan shall contain as part of the financial statements:
(a) a statement of changes in net assets available for benefits (which can also be called a Fund Account) (see paragraph 34.37);
(b) a statement of net assets available for benefits (see paragraph 34.38); and
(c) notes, comprising a summary of significant accounting policies and other explanatory information.
34.36 At each reporting date, the net assets available for benefits shall be measured in accordance with paragraph 28.15(b). Changes in fair value shall be recognised in the statements of changes in net assets available for benefits.
Statement of changes in net assets available for benefits (Fund Account)
34.37 The financial statements of a retirement benefit plan, whether defined contribution or defined benefit, shall present the following in the statement of changes in net assets available for benefits:
(a) employer contributions;
(b) employee contributions;
(c) investment income such as interest and dividends;
(d) other income;
(e) benefits paid or payable (analysed, for example, as retirement, death and disability benefits, and lump sum payments);
(f) administrative expenses;
(g) other expenses;
(h) taxes on income;
(i) profits and losses on disposal of investments and changes in value of investments; and
(j) transfers from and to other plans.
Statement of net assets available for benefits
34.38 The financial statements of a retirement benefit plan, whether defined contribution or defined benefit, shall present the following in the statement of net assets available for benefits:
(a) assets at the end of the period suitably classified; and
(b) liabilities other than the actuarial present value of promised retirement benefits. The basis of valuation of assets shall be presented in the notes to the financial statements.
Disclosures
Assets other than financial instruments held at fair value
34.39 Where a retirement benefit plan holds assets other than financial instruments at fair value in accordance with paragraph 34.36, it shall apply the disclosure requirements of the relevant section of this FRS, for example in relation to investment property it shall provide the disclosures required by paragraph 16.10.
Significance of financial instruments for financial position and performance
34.40 A retirement benefit plan shall disclose information that enables users of its financial statements to evaluate the significance of financial instruments for its financial position and performance.
34.41 A retirement benefit plan shall disclose a disaggregation of the statement of net assets available for benefits by class of financial instrument. A class is a grouping of financial instruments that is appropriate to the nature of the information disclosed and that takes into account the characteristics of those financial instruments.
Fair value
34.42 For financial instruments held at fair value in the statement of net assets available for benefits, a retirement benefit plan shall disclose for each class of financial instrument, an analysis of the level in the fair value hierarchy (as set out in paragraph 11.27) into which the fair value measurements are categorised.
Nature and extent of risks arising from financial instruments
34.43 A retirement benefit plan shall disclose information that enables users of its financial statements to evaluate the nature and extent of credit risk and market risk arising from financial instruments to which the retirement benefit plan is exposed at the end of the reporting period.
34.44 For each type of credit and market risk arising from financial instruments, a retirement benefit plan shall disclose:
(a) the exposures to risk and how they arise;
(b) its objectives, policies and processes for managing the risk and the methods used to measure the risk; and
(c) any changes in (a) or (b) from the previous period. In relation to credit risk, a retirement benefit plan shall, in addition, provide the disclosures set out in paragraphs 34.45 and 34.46.
Credit risk
34.45 A retirement benefit plan shall disclose by class of financial instrument:
(a) The amount that best represents its maximum exposure to credit risk at the end of the reporting period. This disclosure is not required for financial instruments whose carrying amount best represents the maximum exposure to credit risk.
(b) A description of collateral held as security and of other credit enhancements, and the extent to which these mitigate credit risk.
(c) The amount by which any related credit derivatives or similar instruments mitigate that maximum exposure to credit risk.
(d) Information about the credit quality of financial assets that are neither past due nor impaired.
34.46 When a retirement benefit plan obtains financial or non-financial assets during the period by taking possession of collateral it holds as security or calling on other credit enhancements (eg guarantees), and such assets meet the recognition criteria in other sections, a retirement benefit plan shall disclose:
(a) the nature and carrying amount of the assets obtained; and
(b) when the assets are not readily convertible into cash, its policies for disposing of such assets or for retaining them.
Defined benefit plans – actuarial liabilities
34.47 A defined benefit plan is not required to recognise a liability in relation to the promised retirement benefits.
34.48 A defined benefit plan shall disclose, in a report alongside the financial statements, information regarding the actuarial present value of promised retirement benefits including:
(a) a statement of the actuarial present value of promised retirement benefits, based on the most recent valuation of the scheme;
(b) the date of the most recent valuation of the scheme; and
(c) the significant actuarial assumptions made and the method used to calculate the actuarial present value of promised retirement benefits.
OmniPro comment
Retirement benefit plans full set of financial statements under FRS 102 are:
- A statement of changes in net assets
- A statement of net assets available for benefits
- Notes comprising a summary of significant accounting policies and other explanatory information.
Section 34.37 above details the items to be included in the statement net assets available for benefits.
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