Insurers Seek Extension of Insurance Standard’s Effective Date
Principal Financial Group and the American Council of Life Insurers want the Financial Accounting Standards Board (“FASB”) to delay the effective date of its proposed insurance standard by at least one year. In separate letters to the FASB, the insurance companies argue a lack of resources and the need to overhaul existing systems will prevent them and other insurers from implementing the accounting changes before the projected 2021 effective date for public companies. The FASB is currently reviewing the delay request. In the meantime, the board is targeting an August release for its final amendments to guidance concerning insurance company-issued long duration contracts . Based on a proposed Accounting Standards. Read More.
FinREC Releases Working Drafts for Implementing Revenue Standard
Last week, the American Institute of Certified Public Accountants’ Financial Reporting Executive Committee (“FinREC”) issued industry-specific working drafts featuring proposed guidance for implementing Accounting Standards Update No. 2014-09, Revenue From Contracts With Customers, by the Financial Accounting Standards Board (“FASB”). The working drafts, which could be added to Audit and Accounting Guide: Revenue Recognition, are as follows: Aerospace and Defense Revenue Recognition Implementation Issue # 1-5: Transfer of Control on Non-US Federal Government Contracts — Clarification on Whether a Contract Priced at a Loss Could Qualify for Over Time Recognition in Accordance with FASB ASC 606-10-25-27(c): This proposal clarifies FinREC. Read More.
Topics: Accounting Standards Update "ASU", Aerospace, Audit and Accounting Guide: Revenue Recognition, FASB, Financial Reporting Executive Committee "FinREC", FinREC, Gaming, Health Care, insurance, Revenue From Contracts With Customers, Revenue Recognition, Telecommunications
FASB Working to Improve Insurance Accounting
A proposed Accounting Standards Update (“ASU”) has been issued to improve the Financial Accounting Standards Board’s (“FASB”) insurance accounting model. The targeted improvements would impact financial reporting associated with long-related contracts (e.g., life insurance, disability income), and help insurance companies with their accounting efforts. The proposed insurance accounting changes would: Improve when liability for future policy benefits changes are recognized by requiring updated assumptions for assessing the liability; Eliminate an insurance company’s anticipated investment yield to discount liability cash flows, and instead require cash flows are discounted at a high-quality fixed-income instrument yield; Simplify the accounting for certain options or. Read More.