Clarifications will aid consistent application
When the IASB asked for comments on its insurance contracts proposals last year, some respondents voiced concerns about significant diversity in the recognition of the contractual service margin in profit or loss.
Responding to these concerns in its May board meeting, the IASB clarified that, for non-participating contracts, the service represented by the contractual service margin is insurance coverage, while also clarifying the appropriate allocation pattern.
Also this month, the IASB redeliberated the scope exemption for certain fixed-fee service contracts and decided to clarify the guidance on significant insurance risk and accounting for contracts acquired through portfolio transfers or business combinations.
A final standard is still expected in the first half of 2015.
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