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In 1972, the AICPA Insurance Companies Committee issued the industry audit guide, Audits of Stock Life Insurance Companies (referred to in this statement of position as "guide"). Part II of the guide, which discusses the application of generally accepted accounting principles, includes a section on the "Valuation of Investments and Recognition of Realized and Unrealized Gains (Losses) Thereon." That section (p. 89) outlines five acceptable methods of accounting for gains or losses on the sale of all equity securities except preferred stocks. The accounting standards division believes that it is not desirable to have five alternative accounting methods for accounting for equity securities and related investment gains or losses by stock life insurance companies. Therefore, this statement of position expresses the division's conclusions on accounting for all investments and related realized and unrealized gains or losses of stock life insurance companies.1 This statement of position also expresses the division's conclusions on accounting for real estate by stock life insurance companies, which was not discussed in the guide. This statement of position applies only to stock life insurance companies.
Insurance, Life -- Accounting; Investments -- Accounting
Accounting | Taxation
American Institute of Certified Public Accountants. Insurance Companies Committee, "Proposed statement of position on accounting for investments of stock life insurance companies;Accounting for investments of stock life insurance companies" (1978). Statements of Position. 401.