Accounting
AICPA’s Financial Reporting Executive Committee Seeks Feedback on Insurance Entities Working Draft: Targeted Improvements to Long-Duration Contracts
The FASB accounting standard on Long-Duration Contracts makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance company. FinREC and the AICPA ...
Jan. 15, 2021
The American Institute of CPA’s (AICPA) Financial Reporting Executive Committee (FinREC) has issued a working draft of an accounting issue for Insurance Entities and is requesting feedback. The draft is related to the implementation of FASB Accounting Standards Update (ASU) No. 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts.
The FASB accounting standard on Long-Duration Contracts makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-duration contracts issued by an insurance company. FinREC and the AICPA Insurance Expert Panel will continue to develop working drafts on accounting implementation issues that have been identified for the new standard.
The working draft (available here) discusses considerations for application of FASB ASU 2018-12 to assumed reinsurance of traditional and limited payment long-duration insurance contracts. The AICPA seeks feedback on:
- Issue #12: Assumed reinsurance – The level of aggregation at which reserves are calculated under FASB ASC 944-40-30-7.
Final issues for the project will be included in the Audit and Accounting Guide: Life and Health Insurance Entities.
The AICPA is seeking feedback from preparers of financial statements, practitioners and other interested parties. Please submit informal feedback to Kim.Kushmerick@aicpa-cima.com by April 15, 2021.