Accounting Standards
Employee Benefits and Pension Accounting: Defined Contribution vs Defined Benefit Under IAS 19 and FRS 102
A year-end note showing a surprise retirement benefit liability sends many SME owners searching for answers. This article unpacks why defined contribution pensions barely register on the balance sheet while defined benefit schemes create a measured, monitored liability under IAS 19 and FRS 102 Section 28, with a full worked example of actuarial movements, journal entries, and covenant implications.