Miranjit Mukherjee - Actuarial Society of India
Miranjit Mukherjee - Actuarial Society of India
Miranjit Mukherjee - Actuarial Society of India
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RECOGNITION AND MEASUREMENT UNDER IND AS 104<br />
In most respects, IND AS 104 allows an entity to continue to account for insurance contracts<br />
under its previous accounting policies.<br />
However, the standard makes some limited improvements to accounting for insurance<br />
contracts<br />
Liabilities only on existing contracts : Catastrophe provisions and equalization provisions are<br />
not permitted. They are not liabilities.<br />
Liability Adequacy Test : The adequacy <strong>of</strong> insurance liabilities must be tested at the end <strong>of</strong><br />
each reporting period. The liability adequacy test is based on current estimates <strong>of</strong> future cash<br />
flows. Any deficiency is recognized in pr<strong>of</strong>it or loss.<br />
Impairment testing : Furthermore, reinsurance assets are tested for impairment.<br />
No <strong>of</strong>fsetting : Insurance liabilities are presented without <strong>of</strong>fsetting them against related<br />
reinsurance assets.<br />
No <strong>of</strong>fsetting : Insurance expense or income against related reinsurance income or expense.<br />
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