Description
This Discussion Paper has been initiated by the Australian Accounting Standards Board (AASB) and the Australian Accounting Research Foundation (AARF) as the first step in a due process that will lead to the making by the Board of an accounting standard concerned with the financial reporting of life insurance activities. It is pleasing for the Board to note the support given to the preparation of the Paper by the life insurance industry generally. It is also pleasing to note the recognition by the industry that it is appropriate that financial reporting of life insurance activities be on a common basis and that the basis be one that has general understanding and acceptance by users.
Currently the character of financial reporting by the life insurance industry is such as to limit the usefulness of financial reports prepared by life insurers. Generally, such reports are concerned with demonstrating solvency rather than communicating information in the broader sense about financial position and performance. The distinctiveness of life insurance financial reporting has evolved through conventions considered relevant in the industry, the particular requirements of the Insurance and Superannuation Commission, and a view that the characteristics of the industry set its financial reporting apart from that which is generally relevant for entities in other sectors of the economy. ISBN:0909744629
