Long-duration insurance: Proposed deferral and ease of adoption
FINANCIAL REPORTING INSIGHTS |
The Financial Accounting Standards Board issued a proposed Accounting Standards Update (ASU), Financial Services – Insurance (Topic 944): Effective Date and Early Application. If finalized, the standard would provide an additional year for the implementation of ASU 2018-12, Financial Services – Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts, as follows:
- For SEC filers, excluding smaller reporting companies as defined by the SEC, ASU 2018-12 would be effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years
- For all other entities, ASU 2018-12 would be effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025
In addition, the proposal would ease the adoption provisions by allowing insurance companies that choose to early adopt ASU 2018-12 to restate only one previous period, rather than two.
The proposed ASU is available for comment until August 24, 2020.