This resource brings you the practical, how-to accounting and auditing guidance you need to stay compliant.
Whether you’re a CPA performing audit engagements or management at an insurance entity, it is critical for you to understand and be current on the specialized accounting and regulatory requirements you’re subject to. This resource brings you the practical, how-to accounting and auditing guidance you need to stay compliant. The 2020 edition provides valuable background on the life and health insurance industry, products and regulatory issues, and the related transaction cycles that an insurance entity is involved with. It covers recent regulatory updates, including providing information on the standards for long-duration contracts, financial instruments, and leases.
This guide was developed by the former Insurance Companies Committee and the Life Insurance Audit Guide Task Force. This edition of the guide has been modified by the AICPA staff to include certain changes necessary due to the issuance of authoritative guidance since the first edition and other revisions as deemed appropriate. Relevant guidance contained in standards issued through October 1, 2020 is included. This guide includes appendixes that will help you understand the standards for long-duration contracts, financial instruments, leases, and revenue recognition.
Appendix G: FASB ASU No. 2018-12: Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, Accounting Implementation Papers, is included in the online subscription of the Life and Health Insurance Entities – Audit and Accounting Guide. This appendix presents accounting implementation papers developed to assist insurance entities in applying FASB ASU No. 2018-12. The appendix will be updated as accounting implementation papers are finalized. Please see the Insurance Expert Panel webpage for the status of the accounting implementation papers:
Below is a listing of the finalized accounting implementation papers that are included in the appendix as of December 23, 2020:
|Considerations for the Allocation of the Liability for Future Policy Benefits to Revised Units of Account at Transition to ASU No. 2018-12 for Blocks of Business That Had Loss Recognition Prior to the Transition Date||2|
|Claim Liabilities Associated With Long-Duration Traditional Insurance Contracts||1|
|Market Risk Benefits — Considerations Related to Transition||4AB|
|Updating Cash Flow Assumptions in the Net Premium Ratio||8|
|Upon Adoption of ASU No. 2018-12, Is It Permissible for an Entity to Change Its Accounting Policy for All Products to Include the Cost of Reinsurance in Loss Recognition Testing?||11D|
|Amortization of Deferred Acquisition Cost||9ABCD|
|Ceded Reinsurance - Recognition of the Reinsurance Recoverable and Cost of Reinsurance Measurement; The Liability for Future Policy Benefits to Be Used to Reinsure Existing Traditional Life Insurance Contracts; and Application of the 100% Net Premium Ratio Cap and “Floor” (No Negative Liability) Provisions Relating to the Liability for Future Policy Benefits on Ceded Reinsurance Transactions||11ABC|
|Impact of ASU No. 2018-12 on Shadow Accounting||13|
Standing order option:Save 20% now and 10% on future shipments
Looking for group pricing?Contact us