Page 193 - IC46 addendum

Indian Accounting Standards

Explanation of recognised amounts (paragraphs 36 and
37 of Ind AS 104)

Accounting policies

IG17 Ind AS 1 requires disclosure of accounting policies and paragraph
37(a) of this Standard highlights this requirement. In developing disclosures
about accounting policies for insurance contracts, an insurer might conclude
that it needs to address the treatment of, for example, some or all of the
following, if applicable:

(a) premiums (including the treatment of unearned premiums,
renewals and lapses, premiums collected by agents and brokers
but not yet passed on and premium taxes or other levies on
premiums).

(b) fees or other charges made to policyholders.
(c) acquisition costs (including a description of their nature).
(d) claims incurred (both reported and not reported), claims handling

costs (including a description of their nature) and liability
adequacy tests (including a description of the cash flows
included in the test, whether and how the cash flows are
discounted and the treatment of embedded options and
guarantees in those tests, see paragraphs 15–19 of this
Standard). An insurer might disclose whether insurance liabilities
are discounted and, if they are discounted, explain the
methodology used.
(e) the objective of methods used to adjust insurance liabilities for
risk and uncertainty (for example, in terms of a level of
assurance or level of sufficiency), the nature of those models,
and the source of information used in the models.
(f) embedded options and guarantees (including a description of
whether (i) the measurement of insurance liabilities reflects the
intrinsic value and time value of these items and (ii) their
measurement is consistent with observed current market prices).
(g) discretionary participation features (including a clear statement
of how the insurer applies paragraphs 34 and 35 of this Standard

64

Copyright@ The Insurance Times. 09883398055 / 09883380339