In November the Board issued an amendment to FRS 17 ‘Retirement Benefits’ extending the transitional arrangements for the standard until accounting periods beginning on or after 1 January 2005. The Financial Reporting Standard for Smaller Entities was simultaneously amended to implement FRS 17 with full effect for financial statements relating to accounting periods ending on or after 22 June 2006.

With slight adjustment to the implementation dates, the amendments largely reflect the proposals in the exposure draft published in July, which were supported by nearly all respondents.

The IASB announced in June 2002 that it had adopted a project to reconsider certain aspects of IAS 19 (revised 2000) ‘Employee Benefits’, and has subsequently indicated that it hopes to have an agreed revised standard by 2004. The extension to the transitional arrangements of FRS 17 will allow the ASB to effect an orderly transition to revised standards aligned with those of the IASB without mandating two changes in accounting for retirement benefits in a short period.

The deferral of the mandatory full implementation of FRS 17 reflects no weakening of the ASB’s view that the UK standard is the best approach to pensions accounting. The Board continues to encourage early adoption of all the requirements of FRS 17 on a voluntary basis. Where FRS 17 is not adopted early, information prepared in accordance with FRS 17 will continue to be disclosed in the notes.