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.

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

XYZ Retirements benefit scheme

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