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Insurance Contract Accounting Standard to Get Another Round of Scrutiny

The International Accounting Standards Board is asking for more public comment

An ongoing project to revise and revamp accounting standards regarding insurance contracts is set to get another round of scrutiny from the public, the International Accounting Standards Board announced

An ongoing project to revise and revamp accounting standards regarding insurance contracts is set to get another round of scrutiny from the public, the International Accounting Standards Board announced on September 28.

The agency decided September 26 to re-expose for public comment its plans to restructure its insurance contract guidance, but did not make public its decision right away. The agency has been working on unifying the standard with the Financial Accounting Standards Board, but the two bodies remain worlds apart on the issue. Although the IASB acknowledged that an inordinate amount of time has already been spent working on the measures, if felt re-exposure was in the best interest of the process. It is, however, only seeking input on a limited number of points.

"We are very aware of the difficulties faced by insurance companies and pension funds in the current low interest environment," IASB Chairman Hans Hoogervorst said in a statement. "As such we realize the importance of establishing a workable standard based on current measurement as soon as possible. However, it is of equal importance that we get this standard right."

Among other things, the agency will be seeking input on the treatment of participating contracts, the presentation of premiums in income statements and the treatment of unearned profit in an insurance contract.