Accounting Standards for Pension Costs

Geoffrey Whittington

in The Oxford Handbook of Pensions and Retirement Income

Published in print July 2006 | ISBN: 9780199272464
Published online September 2009 | | DOI:

Series: Oxford Handbooks in Business and Management C

Accounting Standards for Pension Costs


This article deals primarily with the problem of accounting for the cost of defined-benefit pension schemes in the accounts of the sponsoring company (the employer). This is one of the most controversial issues currently being debated by accounting standard-setters, following the introduction of an innovative standard on the subject, FRS 17, by the UK Accounting Standards Board (ASB). This standard measured the pension-fund deficit or surplus as the difference between the current values of the pension-fund assets and liabilities, and the effects of changes in valuations were to be reported immediately in the Statement of Recognized Gains and Losses (STRGL). The introduction of FRS 17 coincided with: a sharp decline in stock-market prices; a reduction in the value of pension-fund investment; and a revision of actuarial tables to reflect the increased expectation of life, which increased pension-fund liabilities.

Keywords: defined-benefit pension; pension costs; accounting standards; STRGL; Accounting Standards Board; FRS 17

Article.  8014 words. 

Subjects: Business and Management ; Accounting

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