ROYAL DUTCH SHELL has reported a $19.2bn (£12.3bn) impact on its balance sheet after implementing the revised IAS19 accounting standard for its pension scheme, its latest results show.
The Anglo-Dutch oil giant restated its balance sheet from December 2012 using the revised standards. It showed a jump from a retirement benefit surplus of £4bn to a deficit of £8.3bn, Financial Director’s sister publication Professional Pensions reports.
Previously, Shell used a corridor accounting method, which amortised the value of scheme deficits and left it off the balance sheet over a number of years.
The revised IAS19 no longer allows the corridor method and as a result the whole value of the scheme deficit had to be accounted for on the balance sheet.
For December 2012, the change reduced assets from £8bn to £1.5bn and increased liabilities from £4bn to £9.8bn.
However, over the three months to March 2013, the deficit reduced from £8.3bn to £7.4bn as assets increased to £2.2bn and liabilities fell to £9.6bn.
Although, the deficit positions is up from March 2012 where it stood at £6.7bn.
According to experts, the corridor accounting method is relatively uncommon, used by around 5-10% of FTSE100 companies due to legacy regulations adopted in Europe and the USA.
This news comes after Lloyds Banking Group reported a £2.1bn hit on its balance sheet after adopting the revised standards (PP Online, 30 April).
GoCompare is to demerge from esure and and be floated on the London Stock Exchange with the aim of boosting growth and performance
Three former Tesco executives, including the former finance director of Tesco UK, have been charged with fraud in relation to a £263m accounting scandal at the supermarket chain
Co-operative Group is trialling a new blockchain technology that can be used to track food from source to ensure its authenticity and sustainability
Sports Direct is facing a shareholder backlash despite promising to change some of its more outdated working conditions the sportswear retailer has forced on staff