The Board participated in an educational session on Insurance. No decisions were taken during this session. During this session, Staff explained to the Board, the key aspects of two accounting models - the asset-and-liability approach and the deferral-and-matching approach. The Board noted that under the asset-and-liability approach items are not recognised in the balance sheet unless they meet the definitions of asset or liability, whereas the deferral-and-matching approach analyses the profit and loss effects first and tries to pick up the appropriate assets and liabilities from there, without explicitly considering whether they meet the recognition criteria. The following were the key issues that emerged from this session:

• there was some consensus amongst the Board that the assumptions used in accounting for insurance contracts at inception should not be 'locked in' for accounting purposes throughout the contract; and
• significant discussion is required with industry groups as to what should appropriately be called 'revenue' in relation to an insurance context. Some concern was expressed by Board members that some transactions that are in effect, deposit taking, are being incorporated in disclosed revenue.

The Board discussed briefly how they should interact with the insurance working group. The working group and the Board will consider issues using an iterative process - that is the Board or the working group may be the first to consider a particular issue, with the deliberations of that group being communicated to the other. The Board will have ultimate responsibility for the making of a standard. The working group next meets in late November or early December.