AICPA drafts guidance for insurance standard
The American Institute of CPAs’ Financial Reporting Executive Committee has proposed several working drafts of its guidance on the long-duration insurance accounting standard for insurance companies.
The Financial Accounting Standards Board has a new accounting standard on long-duration insurance contracts that makes targeted improvements to the existing recognition, measurement, presentation and disclosure requirements for long-term contracts issued by an insurance company. The AICPA Insurance Expert Panel and the AICPA’s Financial Reporting Executive Committee, also known as FinREC, have been developing working drafts on accounting implementation issues that have been identified for the new insurance standard, similar to guidance that the AICPA has been developing for other industry-specific issues related to other new accounting standards.
The working drafts for implementation of ASU 2018-12 are available at:
- 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
The AICPA is looking for feedback on the working drafts from preparers of financial statements, practitioners and other interested parties. Any comments should be emailed to Kim.Kushmerick@aicpa-cima.com by April 10, 2020.
When all the guidance has been finalized for the project, it will be included in an upcoming AICPA Audit and Accounting Guide: Life and Health Insurance Entities.