The Financial Accounting Standards Board has proposed a big change in accounting for insurance companies that deal in long-duration contracts like life insurance, annuities, disability, and long-term care.
If issued as proposed, the accounting standards update would require significant implementation efforts by entities that are affected, says PwC in an alert to clients. “Although characterized by FASB as ‘targeted’ improvements, the proposals revise key elements of the measurement models for certain long-duration liabilities, as well as the amortization model for deferred acquisition costs for long-duration contracts,” PwC says.
