UK corporate balance sheets are under threat due to fresh accounting standards that will massively increase the pension deficits of many already-indebted corporates. The study, by the legal advisors Lane, Clark and Peacock, also notes that corporates heavily invested in equities will be particularly susceptible.
The accounting standard, known as FRS17, was recently used to calculate a UK corporate pension deficit of £25 billion ($40 billion). This compares with a surplus of £5 billion under the former standards.
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