FRC welcomes IASB's ED on Insurance Contract accounting

20 June 2013

The FRC welcomed the publication by the IASB of its revised Exposure Draft (ED) containing proposals on measurement and presentation of insurance contracts. The FRC will comment on the ED in line with the IASB's timetable by 25 October, 2013.

Following feedback on the IASB’s earlier proposals in 2010, the FRC is pleased to see specific proposals included on:

• the approach to the adjustment of unearned profits reflecting the inherent uncertainty in calculating the best estimate of the settlement cash flows;
• the presentation of information related to insurance contract revenue and the effects of changes in insurance liability due to discount rates giving users vital information about the business undertaken during the period and the effect of market movements; and
• transitional arrangements on first application of the standard that recognise the long term nature of certain insurance contracts and allow appropriate recognition of future profits on such contracts.

Press release

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