The FASB has been focused on making targeted improvements to the insurance guidance in U.S. GAAP as part of two distinct projects, one focused on short-duration contracts and a second focused on long-duration contracts.
Enhanced insurance contract disclosures may create new and different reporting of claim data for insurers. The FASB’s recent amendment to ASC 944 calls for enhanced disclosures focused principally on expanding reported information about net incurred and paid claim data.
Insurers currently use a variety of different and largely inconsistent local approaches to measure the value of insurance contracts within their statutory financial statements. This diversity makes it difficult to compare companies and may fail to reflect the true economic value of insurance business, which can put insurers at a considerable disadvantage when competing for capital.
Enhanced insurance contract disclosures may create new and different reporting of claim data for insurers.
The short-duration insurance contract disclosures may create new and different reporting of claim data for insurers.
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If a single global insurance accounting standard is not achieved, PwC believes the FASB should only make targeted enhancements to its existing standards.
PwC supports a converged standard. In the absence of a converged standard, we would support making targeted changes to current US GAAP.
The FASB and IASB issued exposure drafts related to insurance contracts that may change the accounting by non-insurers that sell fixed-fee service contracts.
The FASB and IASB issued exposure drafts that would fundamentally change the accounting by insurers and other entities that issue contracts with insurance risk.
The FASB and the IASB issued a revised exposure draft on leases. Although the tax law regarding the treatment of leasing transactions remains unchanged, taxpayers should consider how the Exposure Draft will impact the computation of federal and state taxable income and deferred income tax assets and liabilities associated with their leases.
The FASB’s proposal, expected in June 2013, on accounting for insurance contracts could fundamentally change earnings patterns for insurers and some banks.