• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Free ACCA & CIMA online courses from OpenTuition

Free ACCA & CIMA online courses from OpenTuition

Free Notes, Lectures, Tests and Forums for ACCA and CIMA exams

  • ACCA
  • CIMA
  • FIA
  • OBU
  • Books
  • Forums
  • Ask AI
  • Search
  • Register
  • Login
  • ACCA Forums
  • Ask ACCA Tutor
  • FIA Forums
  • CIMA Forums
  • OBU Forums
  • Qualified Members forum
  • Buy/Sell Books
  • All Forums
  • Latest Topics

Save 20% on ACCA & CIMA Books

Interactive BPP books for June 2026 exams, recommended by OpenTuition.
Get discount code >>

Defined Benefit Discount rate

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA SBR Exams › Defined Benefit Discount rate

  • This topic has 2 replies, 2 voices, and was last updated 7 years ago by AvatarP2-D2.
Viewing 3 posts - 1 through 3 (of 3 total)
  • Author
    Posts
  • August 6, 2018 at 8:57 pm #466495
    Avatarllkkjj
    Participant
    • Topics: 27
    • Replies: 39
    • ☆☆

    Dear Sir,

    I was reading the annual report of sainsburys on there defined benefit plan and read

    “The £589 million decrease in the deficit from
    11 March 2017 was driven by a rise in the discount rate from 2.70 per cent to
    2.80 per cent, and updates to future mortality assumptions. The discount
    rate has been increased this year to use a revised approach that the Group
    believes better reflects expected yields on high quality corporate bonds
    over the duration of the Group’s pension schemes.”

    How would an increase in discount rate decrease a deficit? isn’t both Assets and liabilities are both affected by the same discount rate so the net effect would be zero?

    August 6, 2018 at 10:11 pm #466520
    Avatarllkkjj
    Participant
    • Topics: 27
    • Replies: 39
    • ☆☆

    i think i got it , since the discount rate used for the obligation increased, the obligation in PV terms will be smaller , this does not effect asset as its FV? So the net effect would be a reduction in liability?

    August 7, 2018 at 7:30 pm #466643
    AvatarP2-D2
    Keymaster
    • Topics: 4
    • Replies: 7232
    • ☆☆☆☆☆

    Hi,

    Good to see you keeping up to date with current developments in the real world. Yes, your correct in your assessment and you might also want to look at the recent issue with regards to actuarial valuations and BT.

    Thanks

  • Author
    Posts
Viewing 3 posts - 1 through 3 (of 3 total)
  • You must be logged in to reply to this topic.
Log In

Primary Sidebar

ACCA News:

ACCA My Exam Performance for non-variant

Applied Skills exams is available NOW

ACCA Options:  “Read the Mind of the Marker” articles

Subscribe to ACCA’s Student Accountant Direct

ACCA CBE Exams – Instant Poll

How was your exam, and what was the exam result?

BT CBE exam was.. | MA CBE exam was..
FA CBE exam was.. | LW CBE exam was..

Donate

If you have benefited from OpenTuition please donate.

PQ Magazine

Latest Comments

  • clodzy12 on Group SPL – Example (MYA) – ACCA Financial Reporting (FR)
  • TEDI on Regulatory bodies – CIMA F1 Financial Reporting
  • Ismail12 on Project management – ACCA Strategic Business Leader (SBL)
  • TEDI on CIMA F1 Chapter 3 Test
  • TEDI on CIMA F1 Chapter 1 Test

Copyright © 2026 · Contact · Advertising · OpenLicense · About · Sitemap · Privacy Policy · Cookie settings · Comments · Log in