The UK has, in fact, been almost unique in that, elsewhere, discounting future expected asset proceeds is almost unknown. Even in the UK, it is fair to suggest that the underlying logic has been misunderstood, by actuaries as well as by others. To say, as many of us often have done, that we are discounting future equity dividends has probably been counter-productive.

So, what should we have said? We should, I think, have drawn our clients’ attention to the first actuarial law and then said that we must still make some assumptions about the future.

For a continuing fund, expected to have a long-term future, present market values are not at all indicative of future market values, which are, of course, important (the fund will not last forever). So, we should have stressed that we are estimating future market values, allowing for assumed growth, and discounting the sale price and dividends received until the sale.

This could easily give similar results but has a different, more defensible, ring about it. Had we been talking along similar lines, we might have been able to avoid the FRS17 nonsense.