BT Profits Threatened By Accounting Rules
BT’s 2008 profits would all but disappear if planned changes to accounting rules were brought in today, independent pensions consultant John Ralfe warns.
Proposals recently published by the UK Accountancy Board would require all companies to put fluctuations in value of their retirement funds through the profit and loss account.
When the stock market tumbles, companies with large pension schemes would be forced to incorporate widening pension deficits into their trading figures.
The effect on BT (512p higher to 26234p), which releases second- quarter result this morning, would be amplified by the ‘mismatch’ between its pension liabilities of around Pounds 38bn and its Pounds 20.5bn market worth, said Ralfe..
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