Accounting for M&A in the insurance sector: A practical guide to IFRS and US GAAP implications

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BusCom issues for insurers: December 2007

This publication is for those who wish to gain a broad understanding of the accounting for M&A in the insurance sector with IFRS and/or US GAAP reporting implications.

This serves as a summary publication and, therefore, does not address the many differences of detail that exist between IFRS and US GAAP. Even if the overall approach taken in the guidance is similar, there can be differences in the detailed application, which could have a material impact on the financial statements. This publication focuses on the recognition and measurement similarities and differences most commonly found in practice. When applying the individual accounting frameworks, readers should consult all the relevant accounting standards and, where applicable, their national law. Listed companies should also follow relevant securities regulations – for example, the US Securities and Exchange Commission (SEC) requirements and local stock exchange listing rules.

This publication takes account of authoritative pronouncements issued and in effect under IFRS and US GAAP up to 31 October 2007 applicable to M&A transactions involving insurers. However, IFRS and US GAAP continue to develop. There are various projects in progress currently with the IASB and FASB, including some joint projects, that could impact the basis for accounting for business combinations in future periods, such as IASB-FASB joint project on Business Combinations Phase II, US FAS 157 ‘Fair Value Measurements’, and the IASB’s project on Insurance Contracts. These developments are highlighted in the Epilogue to this publicationbut should not substitute reading the new IFRS and US GAAP standards and interpretations as and when they are issued.