Defining Issues | June 2018

FASB sets effective date for accounting for long-duration insurance contracts

The FASB has directed its staff to proceed to a final standard for written ballot. The FASB decided on the effective date and revised the discount rate used at transition when applying the modified retrospective transition method for traditional and limited-payment insurance contracts.


Proposed ASU on ASC 944

  • Insurance entities within the scope of US GAAP that issue long-duration contracts
  • Not applicable to policyholders of long-duration contracts
  • Not applicable to non-insurance entities

Relevant dates

  • FASB expects to issue a final ASU in August 2018

Key impacts


  • Decided that insurance entities using the modified retrospective transition approach will not reset the discount rate as of the transition date to calculate net premiums and interest accretion for traditional and limited-payment insurance contracts
  • Concluded that the benefits of the proposed ASU outweigh the implementation costs, and will proceed to a final standard for vote by written ballot
  • Decided the effective dates

Effective date:

Annual periods – Fiscal years beginning after

Interim periods – In fiscal years beginning after

Public business entities

December 15, 2020

December 15, 2020

All other entities

December 15, 2021

December 15, 2022

Early adoption allowed? Yes

Related content



Subscribe to our newsletter

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