FASB Decides to Propose Update on Accounting for Insurance Contracts
FASB published the tentative decisions taken at its Board meeting in June 2020. Among other issues, FASB discussed agenda requests regarding the effective date of Accounting Standards Update No. 2018-12 on the targeted improvements to accounting for long-duration insurance contracts (Topic 944). FASB voted to issue a proposed Accounting Standard Update that would grant insurance companies that issue long-duration contracts an additional year to implement the Accounting Standards Update No. 2018-12. Stakeholders will have 45 days to review and provide comment on the proposed Accounting Standard Update, which FASB expects to issue in the coming weeks. FASB directed the staff to draft a proposed Update for vote by written ballot.
At the June meeting, FASB also decided against adding a project to the technical agenda to introduce an alternative effective date of the amendments in Update 2018-12 for certain reinsurance arrangements. Additional decisions were to
- Add a project to the technical agenda to amend the effective date of the amendments in Update 2018-12
- Propose a one-year deferral of the effective date of the amendments in Update 2018-12 for all insurance entities
- Propose a change to the early application provisions of Update 2018-12, whereby the early application transition date would be the beginning of the prior period
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Keywords: Americas, US, Insurance, Accounting, Tentative Decisions, Insurance Contracts, Topic 944, IFRS 17, Implementation Timeline
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