FRC proposes amendments to FRS 102 relating to pension obligations

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The Financial Reporting Council (FRC) has today issued an exposure draft: ‘FRED 55 Draft Amendments to FRS 102 – Pension obligations’, in order to clarify issues relating to accounting for defined benefit pension plans in advance of new UK and Irish GAAP becoming mandatory from 1 January 2015.

These proposed amendments would clarify that:

(a) UK and Irish GAAP does not include all the complexities of IFRS; no additional liabilities need be recognised in respect of a ‘schedule of contributions’ that has been agreed in order to address a deficit in the plan; and

(b) consistent with current practice, the effect of restricting the recognition of a surplus in a defined benefit plan, where the surplus is not recoverable is recognised in other comprehensive income, rather than profit or loss.

Roger Marshall, FRC Board Member and Chairman of the Accounting Council, said:

The proposed amendments are intended to resolve uncertainty over the application of FRS 102 in a proportionate and practical manner before FRS 102 becomes mandatory.

Comments are invited by 21 November 2014.  The FRC expects to issue the final amendments to FRS 102 early in 2015. They will apply to accounting periods beginning on or after 1 January 2015.

Notes to editors

  1. The FRC is responsible for promoting high quality corporate governance and reporting to foster investment.  We set the UK Corporate Governance and Stewardship Codes as well as UK standards for accounting, auditing and actuarial work.  We represent UK interests in international standard-setting.  We also monitor and take action to promote the quality of corporate reporting and auditing.  We operate independent disciplinary arrangements for accountants and actuaries; and oversee the regulatory activities of the accountancy and actuarial professional bodies.


  2. FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland was issued in March 2013 and is applicable for accounting periods beginning on or after 1 January 2015. These proposed amendments relate to accounting for defined benefit pension plans accounted for as such and do not relate to multi-employer plans accounted for as defined contribution plans.


  3. All Press enquiries should be directed to: Sophie Broom, Communications Manager, on telephone: 020 7492 2395/ 07771 808464 or Or to Rita Carolan, Communications Officer on telephone: 020 7492 2307 or email

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