NEW YORK, NY (December 10, 2019) - The American Institute of CPA’s (AICPA) Financial Reporting Executive Committee (FinREC) has issued several working drafts of accounting issues for Insurance Entities, related to the implementation of FASB Accounting Standards Update (ASU) No. 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts, and ASU No. 2016-13, Financial Instruments-Credit Losses, and is requesting feedback.
The new FASB accounting standard on Long-Duration Contracts makes targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance company. FinREC and the AICPA Insurance Expert Panel will continue to develop working drafts on accounting implementation issues that have been identified for the new standard.
“The AICPA is committed to helping insurers with implementation of both the Long-Duration Targeted Improvements and Credit Loss standards” said Kim Kushmerick, CPA, AICPA Associate Director - Accounting Standards. “This is an extensive effort for the many volunteers involved with developing accounting issues that help insurers apply the new principles in both standards.”
The working draft for implementation of ASU 2018-12 is available at:
- Issue #2: Considerations for the Allocation of the Liability for Future Policy Benefits to Revised Units of Account at Transition to FASB ASU 2018-12 for Blocks of Business that had Loss Recognition Prior to the Transition Date
Current Expected Credit Loss, or CECL, is a new standard that will change how many companies, including financial institutions, account for expected credit losses.
The CECL working drafts for implementation of ASU 2016-13 for Insurance Entities are available at:
- Issue #34: Considerations Related to ASC Topic 326: Financial Instruments - Credit Losses, for Reinsurance Recoverables
- Issue #44: Considerations Related to ASC Topic 326: Financial Instruments - Credit Losses, for Premiums Receivable
Final issues for the Long-Duration Targeted Improvements project will be included in the Audit and Accounting Guide: Life and Health Insurance Entities.
Final issues for the CECL project will be included in the new AICPA Audit and Accounting Guide: Credit Losses, as well as the Audit and Accounting Guides: Life and Health Insurance Entities and Property and Liability Insurance Entities.
The AICPA is seeking feedback from preparers of financial statements, practitioners, and any other interested parties. Please submit any informal feedback to Kim.Kushmerick@aicpa-cima.com by February 10, 2020.