Defining Issues | November 2020

 

Insight

FASB ASU defers long-duration insurance contract dates

ASU on long-duration insurance contracts further deferred one year.

Jennifer Austin

Jennifer Austin

Partner, Dept. of Professional Practice, KPMG US

1 212-872-2946

Darcie Garza

Darcie Garza

Managing Director, Dept. of Professional Practice, KPMG US

+1 212-954-1408

KPMG reports on ASU 2020-11, Financial Services – Insurance (ASC 944): Effective Date and Early Application, which was issued on November 5, 2020.

Applicability

ASU 2020-11

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

Relevant dates

Effective date SEC filers that are not smaller reporting companies All other entities

Annual periods – Fiscal years beginning after                                                             

Dec. 15, 2022

Dec. 15, 2024

Interim periods – In fiscal years beginning after

Dec. 15, 2022

Dec. 15, 2025

Early adoption is permitted.

  • If early adoption is elected, the transition date is either the beginning of the prior period presented or the beginning of the earliest period presented.
  • If early adoption is not elected, the transition date is the beginning of the earliest period presented.

 

Key impacts

ASU 2020-11:

  • Further defers the effective date of the ASU on long-duration insurance contracts for all insurance entities.
  • Amends the ASU on long-duration insurance contracts by changing the early adoption transition date to the beginning of the prior period presented or the beginning of the earliest period presented.

Report contents 

  • Applicability
  • Key facts and impacts
  • Effective date deferral
  • Transition date

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