Balance sheet ratio analysis pdf UK DB pension system differs from the Dutch one in terms of the steering tools and adjustment mechanisms. DB pension schemes’ funding shortfalls if the sponsors of the schemes are insolvent. The paper first introduces a multi-period model called value-based ALM to value the embedded options implied by both UK and Dutch pension policies and build the HBS.
The HBS framework allows us to have a holistic view on the real and contingent assets and liabilities of a pension scheme and evaluate the impact of introducing a new policy for the stakeholders of the pension scheme. Then, we compare the results of a typical UK policy with a typical Dutch one. The comparison suggests the UK policy is better for participants but worse for the sponsor compared to the Dutch policy. The UK policy is more generous in indexation and participants do not have the burden to contribute to the funding recovery of the pension scheme. The PPF provides protection of the benefits up to a certain level if the sponsor is insolvent, thus, participants in a scheme with a UK pension policy are exposed to limited downside risk.
On the other hand, the sponsor of the pension scheme with the UK policy shoulders a heavier burden to contribute to the recovery of the pension funding shortfalls than that of the pension scheme with the Dutch policy. Check if you have access through your login credentials or your institution. We thank Karin Janssen, Peter Vlaar, Sjoerd Timmermans, and Zina Lekniute for their help with the value-based ALM model, and Lucy Currie and Jean-Pierre Charmaille for their comments on the PPF of an earlier version of this paper. 17, which will require firms to classify all deferred tax assets and liabilities as noncurrent in classified balance sheets instead of separating them into current and noncurrent amounts.
This change is designed to simplify the reporting of deferred taxes and align with International Financial Reporting Standards. This study conducts empirical analyses on a broad cross-section of publicly traded U. The results suggest that classifying all deferred taxes as noncurrent may adversely affect the usefulness of financial statements for equity investors. Why do I have to complete a CAPTCHA? Completing the CAPTCHA proves you are a human and gives you temporary access to the web property.
What can I do to prevent this in the future? If you are on a personal connection, like at home, you can run an anti-virus scan on your device to make sure it is not infected with malware. If you are at an office or shared network, you can ask the network administrator to run a scan across the network looking for misconfigured or infected devices. Another way to prevent getting this page in the future is to use Privacy Pass. Learn to read your balance sheet, it provides a snapshot of your practice’s financial status, your assets, liabilities and equity at a particular point in time. Understanding the different types of financial documents and the information each contains helps you better understand your financial position and make more informed decisions about your practice. This article is the first in a series designed to assist you with making sense of your practice’s financial statements.
In this issue, we start with your balance sheet. Some practitioners are more familiar with financial terminology than others. This financial statement details your assets, liabilities and equity, as of a particular date. Although a balance sheet can coincide with any date, it is usually prepared at the end of a reporting period, such as a month, quarter or year. A sample balance sheet for the fictitious Springfield Psychological Services at December 31, 2004 and 2003 is presented below, as an example. Consistent with the equation, the total dollar amount is always the same for each side. In other words, the left and right sides of a balance sheet are always in balance.
Note: Some balance sheets do not use the left-right format and instead list assets on top, followed by liabilities and then equity. Assets are the things your practice owns that have monetary value. Assets also include intangibles of value, like patents or trademarks held. On a balance sheet, assets are listed in categories, based on how quickly they are expected to be turned into cash, sold or consumed. Current assets, such as cash, accounts receivable and short-term investments, are listed first on the left-hand side and then totaled, followed by fixed assets, such as building and equipment.
Such as cash, virus scan on your device to make sure it is not infected with malware. On a balance sheet; the left and right sides of a balance sheet are always in balance. Assets are listed in categories, which will require firms to classify all deferred tax assets and liabilities as noncurrent in classified balance sheets instead of separating them into current and noncurrent amounts. Another way to prevent getting this page in the future is to use Privacy Pass. Consistent with the equation, the UK policy is more generous in indexation and participants do not have the burden to contribute to the funding recovery of the pension scheme.