Illustration-statement of changes in net assets-pension fund, Financial Accounting

Illustration-statement of Changes in Net Assets-pension fund

(a) What meetings of creditors must be held and for what purpose in the course of a creditors’ voluntary winding up?                                                   
(b) The following trial balance was extracted from the accounting records of the XYZ Retirement Benefits Scheme for the year ended 30 September 2000.

Accumulated fund as at 1 October 1999

Accrued expensed

Administrative expenses

Cash and demand deposits

Change in market value of investments

Commutation and lump sum retirement benefits

Contributions due within 30 days

Employer normal contributions

Individual transfers in from other schemes

Individual transfers out to other schemes

Investment income

Immovable property

Kenya Government securities

Members’ nominal contributions

Members’ additional voluntary contributions

Pensions

Quoted equity investments

Unpaid benefits

Unquoted equity investments

 

 

2,840

23,460

22,640

4,820

4,940

 

 

1,860

 

132,320

263,605

 

 

7,640

87,835

 

  19,990

571,950

461,560

240

 

 

 

 

 

36,480

3,150

 

47,400

 

 

18,240

4,560

 

 

320

 

571,950

 



Required:

 

The statement of Changes in Net Assets (the Fund Account) for the year ended 30 September 2000 and a statement of Net Assets as at 30 September 2000, in accordance with International Accounting Standard 26 (Accounting and reporting by Retired Benefit Plans)

Solution

(a)    The first meeting of creditors’ voluntary winding up should be held on the same day when the members have passed a resolution to wind up the company or on the day after. In this meeting the creditors shall:

-    Appoint amongst them a chairman
-    Join the members to appoint a liquidator   
-    Join the members to appoint a committee of inspection of up to 5 people.

The directors must present to the members the statement of affairs and the list of creditors. The creditor may also terminate the liquidator earlier appointed by the members

-When the liquidation commenced the creditors shall meet one year after commencement to review the progress and attend to any pending matters. Such meetings are called by the liquidator.
-If the liquidation is not complete after one year the creditors shall meet after lapse of one year for all years in which the liquidation is incomplete.
-When the liquidation is complete the liquidator must call a final meeting and lay before the company and creditors the accounts of winding up.

(b)        XYZ Retirements benefit scheme.

            Statement of changes in net assets as at 30 Sept. 2000

 

Sh. ‘000’

Sh. ‘000’

Contributions received:

 

 

- From employers: Normal

 

36,480

- From employees: Normal

18,240

 

- From employees: Additional voluntary

  4,560

 

 

 

22,800

Transfers in:

 

 

- Individual transfers in from other schemes

 

3,150

Investment income:

 

 

- Sundry investment income

 

 47,400

 

 

109,830

Benefits payable:

 

 

- Pensions

(7,640)

 

- Commutations and lumpsum retirement benefits

(4,820)

 

Payments to and a/c of leavers:

 

 

- Individual transfers out to other schemes

(1,860)

 

 

 

(14,320)

 

 

95,510

Changes in market values of investments

 

(22,640)

 

 

72,870

Payments:

 

 

- Admin expenses

 

(2,840)

Net change for the year

 

70,030

 

 

XYZ Retirements benefit scheme

Balance sheet (statement of Net Assets) as at 30 Sept. 2000

 

Sh. ‘000’

Sh. ‘000’

Investment Assets:

 

 

Fixed interest securities: Kenya Govt

 

263,605

Equity investments: quoted

87,835

 

                             : unquoted

19,990

 

 

 

107,825

Cash and demand deposits

 

  23,460

 

 

394,890

Fixed assets

 

 

Immovable property

 

132,320

 

 

527,210

Current Assets

 

 

Contributions due within 30 days

4,940

 

Current liabilities

 

 

Accrued expenses

(240)

 

Unpaid benefits

(320)

 

 

(560)

 

 

 

   4,380

Net Assets

 

531,590

Accumulated fund at 1 October 1999

 

461,560

Net new money invested as per statement of cha. In NA

 

  70,030

Accumulated fund at 30 Sept. 2000

 

531,590

Posted Date: 12/15/2012 1:23:13 AM | Location : United States







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