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FASB finalizes new standard on insurance contracts

Tammy Whitehouse | August 16, 2018

The Financial Accounting Standards Board has issued a new accounting standard that revises the reporting around long-duration contracts for insurance companies.

The FASB approved Accounting Standards Update No. 2018-12 to improve the financial reporting by insurance companies for contracts such as life insurance, disability income, long-term care, and annuities. Now contained in the Accounting Standards Codification under Topic 944, the standard requires entities to use assumptions at least annually when measuring their liabilities, with the effects recorded in net income.

The new standard gives financial statement users more timely and transparent information about long-term contracts, said FASB Chairman Russ Golden in a statement. The board has been...

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