Handbook  |  March 2019

Long-duration contracts: Targeted improvements

KPMG examines ASU 2018-12, which changes how insurance entities recognize, measure, present and disclose long-duration contacts. Using Q&As, KPMG explains the key requirements in detail.

Applicability

ASU 2018-12

  • Insurance entities in 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

Effective date:  Public business entities  All other entities
Annual periods – Fiscal years beginning after

December 15, 2020 December 15, 2021
Interim periods – In fiscal years beginning after December 15, 2020 December 15, 2022
Early adoption allowed? Yes Yes

 

Key impacts

  • Overview of the accounting and reporting requirements
  • Q&As that answer the questions we are encountering in practice
  • Comparisons to legacy US GAAP

Report contents

  • Liability for future policy benefits
  • Market risk benefits
  • Deferred acquisition costs
  • Other accounting items
  • Enhanced disclosure requirements
  • Effective dates and transition         

Related content

Spotlight on contributors:

Jennifer Austin

Jennifer Austin

Partner, Department of Professional Practice, KPMG (US)

1 212-872-2946
Alan Goad

Alan Goad

Partner, Audit, KPMG US

+1 212-872-3340
Darcie Garza

Darcie Garza

Managing Director, DPP, KPMG US

+1 212-954-1408

 

 

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