Pay and disclosure: presenting a fair picture

Article Abstract:

Statement of Standard Accounting Practice (SSAP) 24, Accounting for Pension Costs, requires new disclosures and accounting changes that can cause problems when they interact with UK Companies Act 1985 requirements for the disclosure of director's emoluments in financial statements. When pension costs charged against a year's profit diverge from a year's amount of paid pension contributions, pension contributions paid to directors during an accounting period and the amount charged against profits in the profit and loss (p&l) account may be different under SSAP 24. The Companies Act requires that the amount of differences between payment and charges be included in the amounts disclosed as directors emoluments. It may be helpful to readers of financial reports to explain the difference between the SSAP 24 charge to the p&l account and amounts disclosed under Companies Act 1985 rules.

Reports, Corporations, Pension funds, Financial statements

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FRS 1 (revised 1996): cash flow statements

Article Abstract:

Financial Reporting Standard 1 (FRS)(Revised 1996) 'Cash Flow Statements' is intended to clarify the financial position and profit or loss of all the companies it covers. It requires all reporting entities within its scope to include a cash flow statement among its financial statements that is prepared in compliance with the provisions set out in paragraphs 6-48 of the FRS. All covered companies have to report the cash generation and cash absorption for a period by explaining important cash flow components in a manner that allows different firms to compare their cash flow performance. In addition, reporting entities are required to disclose information clarifying their solvency, liquidity and financial adaptability.

Cash flow, Corporation reports, Company reports

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