Paper on the use of OCI for the presentation of unearned profits

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Feb 26, 2015

On February 26, 2015, for the upcoming meeting of the Accounting Standards Advisory Forum (ASAF), which is to be held at the IASB's offices in London on March 26-27, 2015, the Accounting Standards Board of Japan (ASBJ) has submitted a paper "Insurance Contracts: Use of OCI for Presentation of Unearned Profits". In the paper, the ASBJ proposes that the contractual service margin (CSM) could be presented as accumulated other comprehensive income (AOCI) as opposed to being presented in the liability section of the statement of financial position.

The ASBJ stresses that it very much appreciates the IASB's long-term efforts in developing an accounting standard for insurance contracts. Yet the ASBJ believes that there are still controversies that reflect technical aspects as well as significant impact on insurers' financial reporting. Among these, the ASBJ has come to believe that the presentation of the CSM warrants further consideration.

The paper was prepared by the ASBJ to stimulate discussions at the next ASAF meeting as well as globally. It's overall aim is to contribute to the IASB's ongoing deliberations and thus to support the Board in developing an insurance contract accounting standard that will be accepted globally.

Please click to access the paper on the ASBJ's website.

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