After many delays in the implementation dates for the long-duration insurance accounting standard, now slated for January 2024, the AICPA has drafted guidance and is seeking feedback from preparers of financial statements, practitioners, and other interested parties by April 10, 2020.
The new accounting standard makes targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements issued by an insurance company. The drafts linked below are the proposed explanatory language additions to the Audit and Accounting Guide: Life and Health Insurance Entities:
- Issue #1: Claim liabilities associated with long-duration traditional insurance contracts
- Issue #4AB: Market Risk Benefits – Considerations related to transition, including the use of hindsight and clarification on the application of the fair value framework of FASB ASC 820 to the initial and subsequent measurement of market risk benefits at fair value
- Issue #8: Updating cash flow assumptions in the net premium ratio
- Issue #9ABC: DAC amortization
Where to send your feedback on the working drafts above? Comments should be emailed to Kim.Kushmerick@aicpa-cima.com by April 10, 2020.