Defining Issues | August 2017


FASB redeliberates proposed ASU on long-duration insurance contracts

KPMG reports on the FASB’s redeliberations on targeted improvements for long-duration insurance contracts. The Board made decisions on the reserving model for nonparticipating traditional and limited-payment insurance contracts.


Proposed ASU on ASC 944

  • Insurance entities that issue long-duration contracts
  • Not applicable to policyholders of long-duration contracts
  • Not applicable to non-insurance entities

Relevant dates

  • September 29, 2016 – FASB issued exposure draft
  • August 2, 2017 – FASB redeliberated exposure draft

Key impacts

  • Insurance entities would be required to update cash flow assumptions at least annually, and remeasure the liability for future policy benefits using a catch-up method
  • Upper-medium grade, fixed income instrument yield would be used to discount future cash flows
  • Insurance entities would apply a prospective transition approach, but would have an option to use a retrospective transition approach

Report contents

  • Applicability
  • Key facts and impacts
  • Updating cash flow assumptions used in measuring the liabilities
  • Discount rate used in measuring the liability
  • Transition
  • Next steps

Related content



Subscribe to our newsletter

Receive timely updates on accounting and financial reporting topics from KPMG.