Download Full Text (424 KB)
This proposed statement of position (SOP) provides guidance on how U.S. companies should account for property and liability reinsurance assumed from foreign insurance companies (foreign reinsurance). The periodic method should be used to account for foreign reinsurance premiums except when, because of local revenue recognition policies, the foreign ceding company cannot provide the information required by the assuming company to estimate both the ultimate premiums and the appropriate periods of recognition in accordance with U.S. generally accepted accounting principles. In such circumstances, the open year method should be used. The periodic and open year methods are not interchangeable in the same circumstances. The zero balance method should not be used. The provisions of this proposed Statement would be effective for contracts entered into in fiscal years beginning on or after December 15, 199X.
Insurance -- United States -- Auditing; Insurance, Property -- United States -- Auditing; Insurance, Liability -- United States -- Auditing; Reinsurance -- Accounting
Accounting | Taxation
American Institute of Certified Public Accountants. Reinsurance Auditing and Accounting Task Force, "Proposed statement of position : accounting for foreign property and liability reinsurance;Accounting for foreign property and liability reinsurance" (1991). Statements of Position. 557.