Accounting for pensions, and other benefits due to employees after they retire, has been one of the most controversial areas of financial reporting over the past 25 years. In the late 1970s, many employers accounted for their pension plans on a mainly cash basis, and pension assets and liabilities were rarely recognized on employers’ balance sheets. The effect of a series of financial reporting standards has transformed the position, so that employers are now required to recognize substantial liabilities (or, more rarely, assets) reflecting their obligations to provide pensions and other post-retirement benefits.