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.
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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
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2,840
23,460
22,640
4,820
4,940
1,860
132,320
263,605
7,640
87,835
19,990
571,950
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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
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Sh. ‘000’
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Sh. ‘000’
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Contributions received:
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|
|
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- From employers: Normal
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36,480
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- From employees: Normal
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18,240
|
|
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- From employees: Additional voluntary
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4,560
|
|
|
|
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22,800
|
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Transfers in:
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|
|
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- Individual transfers in from other schemes
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3,150
|
|
Investment income:
|
|
|
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- Sundry investment income
|
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47,400
|
|
|
|
109,830
|
|
Benefits payable:
|
|
|
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- Pensions
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(7,640)
|
|
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- Commutations and lumpsum retirement benefits
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(4,820)
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|
|
Payments to and a/c of leavers:
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|
|
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- Individual transfers out to other schemes
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(1,860)
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|
|
|
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(14,320)
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|
|
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95,510
|
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Changes in market values of investments
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(22,640)
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|
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72,870
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Payments:
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|
|
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- Admin expenses
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(2,840)
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Net change for the year
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70,030
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XYZ Retirements benefit scheme
Balance sheet (statement of Net Assets) as at 30 Sept. 2000
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|
Sh. ‘000’
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Sh. ‘000’
|
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Investment Assets:
|
|
|
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Fixed interest securities: Kenya Govt
|
|
263,605
|
|
Equity investments: quoted
|
87,835
|
|
|
: unquoted
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19,990
|
|
|
|
|
107,825
|
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Cash and demand deposits
|
|
23,460
|
|
|
|
394,890
|
|
Fixed assets
|
|
|
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Immovable property
|
|
132,320
|
|
|
|
527,210
|
|
Current Assets
|
|
|
|
Contributions due within 30 days
|
4,940
|
|
|
Current liabilities
|
|
|
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Accrued expenses
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(240)
|
|
|
Unpaid benefits
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(320)
|
|
|
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(560)
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|
|
|
|
4,380
|
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Net Assets
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531,590
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Accumulated fund at 1 October 1999
|
|
461,560
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Net new money invested as per statement of cha. In NA
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|
70,030
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|
Accumulated fund at 30 Sept. 2000
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|
531,590
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