Insurance contracts project for accounting
Insurance contracts project for accounting

Summary/Abstract: The International Accounting Standard Board has been working on a new international standard for insurance contract based on fair value for about 10 years now. Details on how to measure such a value in practice were unclear for a long time. This paper aims to present the problem of the appearing Insurance Contracts Project, what it was before and what is the way of preparing this project. In 2004 the International Financial Reporting Standard was published 4 as an interim standard for an insurance contract. In 2006 there was the next step because at the CFO-Forum principles were elaborated for the best estimate based on management’s expectations. In 2007 a Discussion Paper was published and it described a valuation of insurance contracts with a so-called Current Exit Value. The last step was in 2010 with the estimating accounting model of the value of the cash flows resulting from the respective contracts. The Insurance Contract Project is very important for insurance business and finance, especially in the context of Solvency II application.

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