Oil giant BP says the new pension accounting standard FRS17 would have reduced shareholders’ interest by more than $5.5bn (E4.5bn) – though it would have boosted profit.
“The effect of adopting FRS 17 is to increase profit before taxation for 2003 by $354m and to reduce BP shareholders’ interest at 31 December by $5,523m,” BP says in its new annual report.
FRS17 and its international counterpart IAS19 take a market snapshot view of pension liabilities.
“I don’t think any of these numbers are new,” says a BP spokesman. “It’s just bringing them into the balance sheet.”
BP says that costs recognised for providing pension and other post-retirement benefits on a FRS17 basis in 2003 was $582m.
The figure was expected to be just over $1bn in 2004.