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FRS102 example

B

Binky777

Member
Hi all

Have I made a complete hash of this or is there a mistake in the FRS102 example in chapter 22 (pages 28-30)?

When switching the deferred liabilities from SFO to FRS basis, the solutions imply that deferred revaluation is switching from 3.0% pa to 2.0% pa and therefore, as the pre-retirement discount rate has also fallen by 1.0% pa, the deferred pre-retirement net rate hasn't changed.

However, when setting out the bases on page 29, pension increases in deferment were set to be 2.0% pa on both the SFO and FRS basis. The SFO basis does have inflation = 3.0% pa but unless I've completely missed something I don't think this is what should be used in the deferred basis switch?

Assuming I'm right I can follow the rest of the example through with my deferred liabilities - just wanted to make sure I hadn't missed anything/the mistake is picked up for next year!

Thanks :)

Bekah
 
Hi Bekah

Will have a more careful look at this when finalising 2018 materials ... but on a quick look I think you are right and easiest will be to be to change the question, to remove reference to inflation and have deferred revaluation be 3%, so that the solutions as they stand are correct.

Thanks
Stuart
 
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