News February 2015 FRC amends FRS 102 relating to pension obligations

FRC amends FRS 102 relating to pension obligations

27 February 2015

PN 14/15

The Financial Reporting Council (FRC) has today issued Amendments to FRS 102 – Pension obligations to clarify aspects of the accounting for defined benefit pension plans by UK and Irish entities.

The amendments enable sponsoring employers reporting under UK and Irish GAAP to continue with current practice in accounting for defined benefit pension schemes.


  • no additional liability need be recognised for a ‘schedule of contributions’ that has been agreed in order to address a plan deficit when the deficit itself has already been recognised; and
  • the effect of not recognising an irrecoverable surplus in a defined benefit plan is shown in other comprehensive income, rather than profit or loss.

Melanie McLaren, Executive Director of Codes and Standards said:

“The FRC is pleased to be able to clarify for entities applying FRS 102 for the first time that a practical and proportionate reporting basis can be used.”

The amendments have the same effective date as FRS 102, and are applicable to accounting periods beginning on or after 1 January 2015.

Amendments to FRS 102 - Pension obligations (PDF)

Impact Assessment and Feedback Statement: Amendments to FRS 102 - Pension obligations (PDF)

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. These proposals were consulted on in FRED 55 Draft Amendments to FRS 102 – Pension obligations, which was issued in August 2014.

  3. An accompanying Impact Assessment and Feedback Statement is also issued today.

  4. These amendments to FRS 102 relate to defined benefit pension plans where the employer has recognised its share of the scheme’s underlying assets and liabilities and do not relate to multi-employer plans accounted for as defined contribution plans.