Charm has two pension schemes in operation. Pension scheme 1 is a defined benefit scheme only available to employees who worked for the company before May 2015. The actuarial report at 31 May 2021 includes further details as follows: Actuarial valuation: 31 May 2021 000 000 2021 2020 Assets 1,014 912 Liabilities 1,405 1,210 Net liability 391 298 For the year ending 31 May 2021: 000 Current service costs 190 Cash contributions 225 Benefits paid 120 Interest rate applied 3.2% A payment of 225,000 has been made as advised by the actuarial report for contributions to the scheme (see above). The finance team recognised this amount as an employee cost in the draft statement of profit or loss for the year. No further adjustments have been made in respect of this defined benefit scheme. The draft statement of financial position as at 31 May 2021 still recognises a net pension liability of 298 million as was the case last year. Pension scheme 2 is a defined contribution scheme. Under this scheme Charm pays 5% of eligible employees salaries into a pension scheme.. The cash payments are up to date and have also been recognised as an employee cost in the draft statement of profit or loss. I am not sure why there is a liability balance for pension scheme 1 but not for scheme 2, could you please clarify the accounting treatment under IFRS Standards?.