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Valuations - Coggle Diagram
Valuations
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Valuation process
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placing values on assets, benefits and contributions
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ensuring compliance with legislation, regulations and professional guidance.
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Funding valuations
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Normally a desire (or, as the case in the UK), a legal requirement, to ensure that the approach is prudent
For the purpose of setting contributions, there is normally a desire to have more than 50% confidence that the assets and future contributions payable will be sufficient to meet the benefits as they fall due.
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Accounting valuations
Valuations performed for the purposes of shareholder disclosure use methods and assumptions which are to some degree prescribed by the relevant accounting standards.
In line with general accounting principles, there is usually more emphasis on choosing assumptions which are an unbiased realistic assessment of future experience.
Purpose
To help stakeholders (e.g. the sponsor, trustees and members) in decision making