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 proposal to presented the CSM as AOCI aims at promoting consistency between the presentation requirement of the CSM and the definition of a liability under the Conceptual Framework. The ASBJ also believes that this AOCI presentation could be applied irrespective of whether insurance contracts contain non-participating or participating features as the CSM would not significantly differ between participating contracts and non-participating contracts.
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.