Statements of Position

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Description

This proposed Statement of Position (SOP) would provide guidance on accounting by insurance and other enterprises for guaranty-fund and certain other insurance-related assessments. The SOP provides: 1. Guidance for determining when an insurance enterprise should recognize a liability for guaranty-fund and other assessments. 2. Guidance on how to measure the liability and allows for the discounting of the liability, if the amount and timing of the cash payments are fixed and reliably determinable. 3. Criteria for when an asset may be recognized for a portion or all of the assessment liability or paid assessment that can be recovered through premium tax offsets or policy surcharges. 4. Requirements for disclosure of certain information. This SOP would be effective for financial statements for fiscal years beginning after December 15, 1 997. Early adoption is encouraged. Previously issued annual financial statements should not be restated. Initial application of this SOP should be as of the beginning of an entity's fiscal year (that is, if the SOP is adopted prior to the effective date and during an interim period other than the first interim period, all prior interim periods should be restated). Insurance enterprises should report the effect of initially adopting this SOP in a manner similar to a cumulative effect of a change in accounting principle (refer to paragraph 20 of Accounting Principles Board [APB] Opinion No. 20, Accounting Changes).

Publication Date

1996

Relational Format

Book

Keywords

Insurance companies -- United States -- Finance; Corporations -- Taxation -- Accounting -- Standards -- United States; Insurance -- Accounting -- Standards; Insurance -- Taxation -- Accounting -- Standards -- United States; Insurance, Surety and fidelity; Special funds -- United States -- States

Disciplines

Accounting | Taxation

Comments

Originally published by: American Institute of Certified Public Accountants; Copyright and permission to reprint held by: American Institute of Certified Public Accountants.

Proposed statement of position : Accounting by insurance and other enterprises for guaranty-fund and certain other insurance-related assessments ;Accounting by insurance and other enterprises for guaranty-fund and certain other insurance-related assessments; Exposure draft (American Institute of Certified Public Accountants), 1996, Dec. 5

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