Pensions accounting disclosures
A company’s directors are responsible for setting the assumptions used to determine pension liabilities under UK and international accounting standards, which will then be subject to scrutiny by the auditors.
Barnett Waddingham’s latest edition of 'Current Issues in Pensions Financial Reporting' details the market yields and other factors to be taken into consideration as at 31 December 2013. It also covers some technical and current issues relevant to those involved in preparing and auditing the pensions disclosures.
For example, the corporate bond yield curve has flattened out beyond about the 10-year duration mark, meaning that there is less scope to adjust the index yield upwards. However, there is still a good 0.75% difference between the highest and lowest yield at around the 20-year duration mark. The inflation curve remains steep, meaning that assumptions will vary substantially between schemes of different maturity.