|This paper addresses the recognition of obligations arising from retirement pension schemes, other than those relating to employee compensation. This includes both pensions paid by social security schemes and unfunded government pension arrangements. Currently the pension obligations of most (possibly all) governments are not recognized at all (i.e., only the cash flows are recorded) or recognized only when pensions are due for payment. However, governments have built up, and continue to build up, substantial obligations to make pension payments in future. The failure to measure these accumulating obligations means that important information on the current liabilities of governments is not recognized in general purpose financial statements.
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