Detail Insurance and Reinsurance Without Risk Transfer   Oleh:  Hasnani, Raza Jenis: Article from Bulletin/Magazine Dalam koleksi: Journal of Accountancy vol. 187 no. 3 (1999), page 49-54. Topik: INSURANCE; insurance; risk transfer Ketersediaan Perpustakaan Pusat (Semanggi) Nomor Panggil: JJ85.8 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada     Lihat Detail Induk Isi artikel The accounting consequences of transferring insurance or reinsurance risk have posed a dilemma to both companies and their CPA s for many years. While previous guidance said an entity should use deposit accounting when it entered into a contract that did not transfer a sufficient amount of risk, the guidance did not define deposit accounting or indicate how to implement it. Companies that enter into insurance and reinsurance contracts need to know precisely how such arrangements will affect their financial statements. Because there was no guidance on the methodology of deposit accounting, this was not always possible. To address the problem, AcSEC issued a position statement. In October 1998 AcSEC issued SOP 98 - 7, Deposit Accounting : Accounting for Insurance and Reinsurance Contracts That Do Not Transfer Insurance Risk. However, the SOP solves only part of the problem. While it offers guidance to entities that have determined that deposit accounting is warranted, it unfortunately does not provide guidance on when an entity should account for an insurance or reinsurance contract using the deposit method. SOP 98 - 7 applies to contracts that appear to be insurance or reinsurance arrangements but that may not meet the transfer - of - risk requirements in FASB Statement no. 5, Accounting for Contingencies, and Statement no. 113, Accounting and Reporting for Reinsurance of Short - Duration and Long - Duration Contracts. Previous pronouncements about the accounting treatments for such situations were not definitive. Statement no. 5 requires that if an insurance or reinsurance contract does not indemnify the insured or reinsured company, the entity should use the deposit method. No authoritative guidance on risk transfer rules for insurance contracts is provided in this or any subsequent standard. Statement no. 113 says that because reinsurance contracts do not transfer insurance risk, the entity should use deposit accounting if the probability of significant changes in the amount or timing of payments is remote. Insurance risk has two aspects : underwriting risk and timing risk. For example, a medical practitioner has two motives when she purchases insurance : (1) to transfer the risk that she will have to pay a malpractice claim (underwriting risk) and (2) to remove the risk that she will have to pay claims at a time when she does not have sufficient liquidity (timing risk). SOP 98 - 7 addresses insurance and reinsurance contracts that transfer significant underwriting or timing risk, contracts that transfer neither of these risks and contracts with indeterminate risk. It applies to all insurance and noninsurance entities and to both the insured and the insurer. The SOP does not provide entities with guidance on the risk transfer rules for insurance contracts. Authoritative accounting literature does not yet address this issue. Opini Anda Klik untuk menuliskan opini Anda tentang koleksi ini! Kembali

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