P92_Ch 8 (Accounting Standards and insurance company accounts)
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International Accounting Standards Board
- >>> independant standard setting body of the IASC foundation
- >>> create IFRS & IFRS for SMEs
Standards Advisory Council
>>> technical advice to IASB
International Financial Reporting Interpretations Committee
>>> interprets and offers guidance where divergence in practice occurs
International Accounting Standards Committee Foundation
- >>> monitors, reviews effectiveness, appoints and funds IASB
- >>> reports to monitoring board
Underlying assumptions of IFRS
- Accrual basis
- Going concern
IFRS framework describes the qualitative characteristics of financial statements as being...
What is the IFRS accounting standard for insurance companies?
1. extensive disclosures must be made in relation to insurance risk management, interest & credit risk info, terms & conditions of insurance contracts and the impact on future cash flows
2. insurance liabilities must be kept on an insurers balance sheet until they are discharged, cancelled or expire
3. insurance liabilities must be kept on the insurer's balance sheet without off-setting them against related reinsurance assests
4. a test for the adequacy of recognised insurance liabilities
5. an impairment test for reinsurance assests
6. provisions for possible claims under contracts that are not in existence at the reporting date (such as catastrophes) are not permitted on the balance sheet.
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