Defining Issues | July 2020

 

Insight

FASB exposes ASU to delay long-duration contract dates

FASB proposes delay to effective dates and alignment of transition dates due to COVID-19.

Updated: KPMG comments on the FASB’s proposal to defer the effective dates for its ASU on long-duration insurance contracts and to align the adoption and early adoption transition dates.

Applicability

Proposed ASU on ASC 944

  • Insurance entities that issue long-duration insurance contracts
  • Excludes policyholders of long-duration insurance contracts
  • Excludes non-insurance entities

Relevant dates

  • July 9, 2020 – FASB issued proposed ASU
  • August 24, 2020 – Comments due on proposed ASU

Key impacts

The FASB’s proposed ASU would:

  • defer the effective date of the ASU on long-duration insurance contracts for all insurance entities;
  • amend the early adoption provisions of its ASU on long-duration insurance contracts to change the early adoption transition date to the beginning of the prior period – to align it with the regular adoption transition date.

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