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FRS 17 Retirement Benefits

 FRS 17 (November 2000)

 Amendment to FRS 17 and FRSSE (November 2002)

FRS 17 sets out the accounting treatment for retirement benefits such as pensions and medical care during retirement. It replaced SSAP 24 ‘Accounting for pension costs’ and UITF Abstract 6 ‘Accounting for post-retirement benefits other than pensions’.

The main requirements of FRS 17 are:
  1. pension scheme assets are measured using market values
  2. pension scheme liabilities are measured using a projected unit method and discounted at an AA corporate bond rate
  3. the pension scheme surplus (to the extent it can be recovered) or deficit is recognised in full on the balance sheet
  4. the movement in the scheme surplus/deficit is analysed into:
    1. the current service cost and any past service costs; these are recognised in operating profit
    2. the interest cost and expected return on assets; these are recognised as other finance costs
    3. actuarial gains and losses; these are recognised in the statement of total recognised gains and losses

In December 2006 the ASB issued an amendment to FRS 17 which amends the disclosure requirement set out in the FRS.

The requirements of FRS 17, following a long transition period, are effective for accounting periods beginning on or after 1 January 2005.

The requirements of the Amendment issued in December 2006, are effective for accounting periods beginning on or after 6 April 2007. Early adoption is encouraged.

*This web-version of FRS 17 has been updated as it was noted that paragraph 44 of the previous web-version did not agree with printed copies of FRS 17. The words "equal to the service cost divided by the discount rate" have been deleted from the web-version.

To obtain a hard copy of this publication, please go to

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