The Financial Reporting Council (FRC) is consulting on proposed amendments to FRS 102 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.

The ED, FRED 55 Draft Amendments to FRS 102 – Pension obligations, is designed to clarify that UK and Irish GAAP does not include all the complexities of IFRS, and so 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.

It also clarifies that, 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.’

The deadline for comments is 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.

The ED is here: FRED 55: Draft Amendments to FRS 102 - Pension obligations

To read our extensive coverage of FRS 102, enter search term FRS 102 for a ten-part guide to FRS 102 implementation.

Click here to read our FRS 102 expert, Helen Lloyd FCA, on the Ten things you need to know about FRS 102