Defining Issues | June 2020

 

Insight

FASB may delay long-duration insurance contract dates

The FASB has tentatively decided to delay the effective dates and to align transition dates due to COVID-19.

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

Alan Goad

Alan Goad

Partner, Dept. of Professional Practice, KPMG US

+1 212-872-3340

KPMG reports that the FASB tentatively decided to defer the effective date for its ASU on long-duration insurance contracts and align both the adoption and early adoption transition dates.

Applicability

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

Relevant dates

  • June 10, 2020 – FASB tentative decision
  • July 2020 – Expected issuance of proposed ASU

Key impacts

At its June 10, 2020 meeting, the FASB voted to issue a proposed ASU with a 45-day comment period that would:

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

Report contents

  • Applicability
  • Key facts and impacts
  • Effective date deferral
  • Transition date
  • Another agenda item

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