The Accounting Standards Board (AcSB) undertook a project to provide guidance on the recognition and measurement of the cash surrender value of an insurance contract. Through consultations, the AcSB heard that there was diversity in the accounting for the cash surrender value of an insurance contract. This project addressed issues related to recognition, measurement, presentation, and disclosure of insurance contracts with cash surrender value.
The AcSB decided to address the issues through an Accounting Guideline because providing guidance in one location would be simpler and the guidance applies specifically to life insurance contracts with cash surrender value. Accounting Guidelines are a primary source of generally accepted accounting principles. They set out how existing Sections shall be applied in specific cases or the Board’s conclusions on other particular issues of concern with respect to financial reporting.