|
|
 | | | |
- close
- close
- close
- close
This excerpt taken from the BP 6-K filed Dec 13, 2006. Pensions and other postretirement benefits: In September 2006, the FASB issued SFAS No. 158 ‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)’ (SFAS 158). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in the statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. Because the funded status of benefit plans is fully recognized in the statement of financial position, a minimum liability will no longer be recognized. Retrospective application of SFAS 158 is not permitted. The Group will adopt SFAS 158 with effect from December
31, 2006. Upon adoption of SFAS 158, the recognition of the overfunded or underfunded status of the Group’s defined benefit postretirement plans will generally accord with the Group’s IFRS accounting. Differences in recognition rules for actuarial gains and losses will continue to give rise to differences in periodic pension and other postretirement benefit costs as measured under IFRS and US GAAP. At December 31, 2006, it is estimated that the Group’s shareholders’ equity, as adjusted to accord with US GAAP, will decrease by approximately $3 billion. The actual effects of adopting SFAS 158 will be based on the funded status of the Group’s plans at December 31, 2006.
-54- BP p.l.c. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) This excerpt taken from the BP 6-K filed Nov 17, 2006. Pensions and other postretirement benefits: In September 2006, the FASB issued SFAS No. 158 ‘Employers’ Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No. 87, 88, 106, and 132(R)’ (SFAS 158). SFAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan (other than a multiemployer plan) as an asset or liability in the statement of financial position and to recognize changes in that funded status in the year in which the changes occur through comprehensive income. Because the funded status of benefit plans is fully recognized in the statement of financial position, a minimum liability will no longer be recognized. Retrospective application of SFAS 158 is not permitted. The Group will adopt SFAS 158 with effect from December
31, 2006. Upon adoption of SFAS 158, the recognition of the overfunded or underfunded status of the Group’s defined benefit postretirement plans will generally accord with the Group’s IFRS accounting. Differences in recognition rules for actuarial gains and losses will continue to give rise to differences in periodic pension and other postretirement benefit costs as measured under IFRS and US GAAP. At December 31, 2006, it is estimated that the Group’s shareholders’ equity, as adjusted to accord with US GAAP, will decrease by approximately $3 billion. The actual effects of adopting SFAS 158 will be based on the funded status of the Group’s plans at December 31, 2006.
-54- BP p.l.c. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) This excerpt taken from the BP 20-F filed Jun 13, 2006. (k) Pensions and other postretirement benefits With effect from January 1, 2004 BP adopted Financial Reporting Standard No. 17 'Retirement Benefits' (FRS 17). Under FRS 17, net surpluses and deficits of funded schemes for pensions and other postretirement benefits are included in the Group balance sheet at their fair values and all movements are reflected in the income statement, except for actuarial gains and losses which are F - 115 reflected in the Statement of Total Recognized Gains and Losses. This contrasts with Statement of Financial Accounting Standards No. 87 'Employers' Accounting for Pensions' (SFAS 87) under which actuarial gains and losses are not recognized as they occur but are recognized systematically and gradually over subsequent periods. Where a pension plan has an unfunded accumulated benefit obligation, US GAAP requires such amount to be recognized as a liability in the balance sheet. The adjustment resulting from the recognition of any such minimum liability, including the elimination of amounts previously recognized as a prepaid benefit cost, is reported as an intangible asset to the extent of unrecognized prior service cost with the remaining amount reported in comprehensive income. The adjustments to profit for the year and to BP shareholders' interest to accord with US GAAP are summarized below.
This excerpt taken from the BP 6-K filed Mar 13, 2006. Pensions and other postretirement benefits
The cost of providing benefits under the defined benefit plans is determined separately for each plan using the projected unit method, which attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of defined benefit obligation) and is based on actuarial advice. Past service costs are recognized in profit or loss on a straight-line basis over the vesting period or immediately if the benefits have vested. When a settlement (eliminating all obligations for benefits already accrued) or a curtailment (reducing future obligations as a result of a material reduction in the scheme membership or a reduction in future entitlement) occurs, the obligation and related plan assets are remeasured using current actuarial assumptions and the resultant gain or loss recognized in the income statement during the period in which the settlement or curtailment occurs.
The interest element of the defined benefit cost represents the change in present value of scheme obligations resulting from the passage of time, and is determined by applying the discount rate to the opening present value of the benefit obligation, taking into account material changes in the obligation during the year. The expected return on plan assets is based on an assessment made at the beginning of the year of long-term market returns on scheme assets, adjusted for the effect on the fair value of plan assets of contributions received and benefits paid during the year. The difference between the expected return on plan assets and the interest cost is recognized in the income statement as other finance income or expense.
Actuarial gains and losses are recognized in full in the Group statement of recognized income and expense in the period in which they occur.
The defined benefit pension asset or liability in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less any past service cost not yet recognized and less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information and, in the case of quoted securities, is the published bid price. The value of a net pension benefit asset is restricted to the sum of any unrecognized past service costs and the present value of any amount the Group expects to recover by way of refunds from the plan or reductions in the future contributions.
Contributions to defined contribution schemes are recognized in the income statement in the period in which they become payable.
This excerpt taken from the BP 6-K filed Nov 17, 2005. Pensions and other postretirement benefits
For defined benefit pension and postretirement benefit plans, plan assets are measured at fair value and plan liabilities are measured on an actuarial basis using the projected unit credit method and discounted at an interest rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the plan liabilities.
The service cost of providing pension and other postretirement benefits to employees for the period is charged to the income statement. The cost of making improvements to pension and other postretirement benefits is recognized in the income statement on a straight-line basis over the period during which the increase in benefits vest. To the extent that the improvements in benefits vest immediately, the cost is recognized immediately. These costs are recognized as an expense.
- 27 -
BP p.l.c. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
Note 1 - Significant accounting policies (continued)
This excerpt taken from the BP 6-K filed Sep 7, 2005. Pensions and other postretirement benefits
For defined benefit pension and postretirement benefit plans, plan assets are measured at fair value and plan liabilities are measured on an actuarial basis using the projected unit credit method and discounted at an interest rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the plan liabilities.
The service cost of providing pension and other postretirement benefits to employees for the period is charged to the income statement. The cost of making improvements to pension and other postretirement benefits is recognized in the income statement on a straight-line basis over the period during which the increase in benefits vest. To the extent that the improvements in benefits vest immediately, the cost is recognized immediately. These costs are recognized as an expense.
24
A charge representing the unwinding of the discount on the plan liabilities during the period is included within other finance expense.
A credit representing the expected return on the plan assets during the period is included within other finance expense. This credit is based on the market value of the plan assets, and expected rates of return, at the beginning of the year.
Actuarial gains and losses may result from: differences between the expected return and the actual return on plan assets; differences between the actuarial assumptions underlying the plan liabilities and actual experience during the year; or changes in the actuarial assumptions used in the valuation of the plan liabilities. Actuarial gains and losses, and taxation thereon, are recognized in the statement of recognized income and expenses.
For defined contribution plans, contributions payable for the period are charged to the income statement as an operating expense.
This excerpt taken from the BP 6-K filed Sep 7, 2005. Pensions and other postretirement benefits
For defined benefit pension and postretirement benefit plans, plan assets are measured at fair value and plan liabilities are measured on an actuarial basis using the projected unit credit method and discounted at an interest rate equivalent to the current rate of return on a high quality corporate bond of equivalent currency and term to the plan liabilities.
The service cost of providing pension and other postretirement benefits to employees for the period is charged to the income statement. The cost of making improvements to pension and other postretirement benefits is recognized in the income statement on a straight-line basis over the period during which the increase in benefits vest. To the extent that the improvements in benefits vest immediately, the cost is recognized immediately. These costs are recognized as an expense.
22
A charge representing the unwinding of the discount on the plan liabilities during the period is included within other finance expense.
A credit representing the expected return on the plan assets during the period is included within other finance expense. This credit is based on the market value of the plan assets, and expected rates of return, at the beginning of the year.
Actuarial gains and losses may result from: differences between the expected return and the actual return on plan assets; differences between the actuarial assumptions underlying the plan liabilities and actual experience during the year; or changes in the actuarial assumptions used in the valuation of the plan liabilities. Actuarial gains and losses, and taxation thereon, are recognized in the statement of recognized income and expenses.
For defined contribution plans, contributions payable for the period are charged to the income statement as an operating expense.
This excerpt taken from the BP 20-F filed Jun 30, 2005. (k) Pensions and other postretirement benefits With effect from January 1, 2004 BP adopted Financial Reporting Standard No. 17 'Retirement Benefits' (FRS 17). Under FRS 17, net surpluses and deficits of funded schemes for pensions and other postretirement benefits are included in the Group balance sheet at their fair values and all movements are reflected in the income statement, except for actuarial gains and losses which are F - 116 reflected in the Statement of Total Recognized Gains and Losses. This contrasts with Statement of Financial Accounting Standards No. 87 'Employers' Accounting for Pensions' (SFAS 87) under which actuarial gains and losses are not recognized as they occur but are recognized systematically and gradually over subsequent periods. Where a pension plan has an unfunded accumulated benefit obligation, US GAAP requires such amount to be recognized as a liability in the balance sheet. The adjustment resulting from the recognition of any such minimum liability, including the elimination of amounts previously recognized as a prepaid benefit cost, is reported as an intangible asset to the extent of unrecognized prior service cost with the remaining amount reported in comprehensive income. The adjustments to profit for the year and to BP shareholders' interest to accord with US GAAP are summarized below.
| EXCERPTS ON THIS PAGE:
| ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| |||||||
