Ind AS 104, Insurance Coverage Contracts: The goal of Ind AS 104 is to define the monetary reporting for insurance agreements by any entity that releases such contracts (described as an insurance company). In particular, this Ind AS requires:
- minimal improvements to accounting by insurance companies for insurance
- disclosure that recognizes and discusses the quantities in an insurer’s financial statements developing from insurance contracts and helps users of those financial statements understand the quantity, timing and unpredictability of future money streams from insurance coverage
Ind AS 104
An insurance agreement is an agreement under which one party (the insurer) accepts substantial insurance coverage danger from another celebration (the insurance policy holder) by consenting to compensate the insurance policy holder if a defined unsure future event (the insured occasion) adversely impacts the insurance policy holder.
The Basic applies to all insurance coverage agreements (including reinsurance contracts) that the entity issues and reinsurance agreements that it holds and monetary instruments that it releases with a discretionary involvement function and Ind AS 107, Financial Instruments: Disclosures, requires disclosure about monetary instruments, consisting of financial instruments which contain such features.
The Ind AS exempts an insurance provider from some requirements of other Ind AS. The Ind AS:
- prohibits provisions for possible claims under agreements that are not around at the end of the reporting period (such as catastrophe and equalisation arrangements).
- requires a test for the adequacy of acknowledged insurance liabilities and a disability test for reinsurance
- needs an insurance company to keep insurance liabilities in its declaration of financial position until they are released or cancelled, or expire, and to present insurance coverage liabilities without offsetting them against associated reinsurance
The Ind AS allows an insurance provider to alter its accounting policies for insurance agreements only if the modification makes the monetary statements more pertinent and no less trustworthy, or more reputable and no less relevant. In specific, an insurer might continue any of the following practices, although it may continue using accounting policies that involve them:
- determining insurance coverage liabilities on an undiscounted
- determining contractual rights to future financial investment management fees at an amount that exceeds their fair value as indicated by a contrast with current fees charged by other market individuals for comparable services.
- using non-uniform accounting policies for the insurance contracts of
The Ind AS permits an insurer to change its accounting policies so that it re– steps designated insurance coverage liabilities to show current market rates of interest and identifies changes in those liabilities in earnings or loss. Without this consent, an insurer would have been required to apply the modification in accounting policies consistently to all similar liabilities.
The Ind AS requires disclosure to assist users understand:
- the amounts in the insurance company’s financial declarations that develop from insurance coverage
- the nature and extent of threats developing from insurance coverage
Recommended Articles
- Kinds Of Vouchers
- Types of Lease
- Scope of Accounting
- Standard Concepts of Accounting
- CA Final Admit Card
- CA Final RTP
- Pan Card Status
- CA IPCC RTP
- CA Final Question Documents
- Earnings Tax Slab Rates
- Sub Fields of Accounting
.
1 photos of the "Ind AS 104, Insurance Contracts (All you need to know about)"
