12 Days of SSAP: When GAAP Doesn’t Fit – ASUs Rejected for Statutory Reporting

JLK Rosenberger is carrying on our holiday tradition of taking a new perspective on a holiday classic – the Twelve Days of Christmas. Rather than filling your head with turtle doves and gold rings, we are focusing on the latest changes to SSAP and how they will impact your insurance entity in 2026 and beyond.

Day 7 of our 12 Days of SSAP requires no introduction. Here are the FASB Accounting Standard Updates issued in 2025 that were not considered applicable to Statutory accounting.

As anticipated, several GAAP Accounting Standards Updates (ASUs) were deemed not applicable for statutory accounting. For those of us who love diving into the details, here’s a brief summary of the ASUs that were rejected:

• ASU 2025‑02, Liabilities: the standard updates U.S. GAAP to remove obsolete Securities and Exchange Commission (SEC) guidance related to safeguarding crypto‑assets held for platform users. Entities are no longer required to recognize both an asset and liability for such custodial crypto‑asset obligations under the prior guidance. Going forward, firms with crypto‑asset safeguarding obligations should evaluate whether a liability exists under the general contingent liability guidance in ASC 450‑20 instead.
• ASU 2017-05, Codification Improvements to Topic 995, U.S. Steamship Entities: the standard clarifies how to account for gain contingencies (e.g., potential gains from legal settlements, tax refunds, or contract incentives) when applying ASC 606 revenue recognition guidance. ASU 2017‑05 reinforces that gain contingencies should not be included in revenue recognition under ASC 606 until they are realized or realizable and earned, ensuring consistency with existing GAAP on contingent gains.
• ASU 2024‑03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): the update introduces new disclosure requirements to increase transparency about the composition of expenses reported on the income statement for public business entities (PBEs). Under the update, companies must provide detailed, tabular disclosures in the notes showing the breakdown of certain expense line items into specified natural expense categories, such as purchases of inventory, employee compensation, depreciation, and intangible asset amortization, among others. It also requires a definition and total amount of selling expenses and a qualitative description of other amounts not separately disclosed. The goal is to give investors clearer insight into cost structures to better evaluate performance and future cash flows.
• ASU 2025‑01, Income Statement—Reporting Comprehensive Income –Expense Disaggregation Disclosures (Subtopic 220-40): the update clarifies when the expense disaggregation disclosure requirements originally introduced in ASU 2024‑03 must be adopted.
• ASU 2023‑07, Segment Reporting (Topic 280): the standard enhances and expands the disclosures that public companies must provide about their reportable segments.

Deep Dive

You can read more at the NAIC here.