The overall combined cost of running a defined benefit scheme will rise by £10bn should new proposed accounting rules from the International Accounting Standards Board (IASB) are implemented, according to PricewaterhouseCoopers (PwC).

The warning comes from the firm as it prepares to submit a response to the IASB's consultation on the changes to pensions accounting. PwC has added, however, that it approves of transparency that the changes would bring as they will "improve both long-term confidence of investors and business decision-making".

Brian Peters, a partner at the professional services firm, said the proposals would radically change the way organisations are required to account for pension costs.

"(They) would hit the profits of companies with UK or overseas defined benefits pension schemes," he said.

"A company with a £2bn pension scheme would typically see reported pension costs rise by about £25m a year. We are likely to see resistance to the accounting changes from companies in both the UK and rest of Europe, and some people are very concerned on the further impact on company motivation to provide defined benefit pensions, in both the UK and abroad."

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