The American Institute of Certified Public Accountants recently issued TIS Section 2240.06, Measurement of Cash Value Life Insurance Policy, which provides guidance regarding how a company should measure and record a cash value life insurance policy that it purchases for itself on the company’s balance sheet. This guidance quotes Financial Accounting Standards Board Accounting Standards Codification 325-30, Investments in Insurance Contracts, which states that an investment in a life insurance contract should be reported as an asset. Further, the guidance states that an asset representing an investment in a life insurance contract should be measured subsequently at the amount that could be realized under the insurance contract as of the date of the statement of financial position. Additional guidance is provided for determining the amount that could be realized.
TIS Section 2240.06 is available in full |
