Summary of Interpretation No. 40

Applicability of Generally Accepted Accounting Principles to Mutual Life Insurance and Other Enterprises—an interpretation of FASB Statements No. 12, 60, 97, and 113

Summary

This Interpretation clarifies that enterprises, including mutual life insurance enterprises, that issue financial statements described as prepared "in conformity with generally accepted accounting principles" are required to apply all applicable authoritative accounting pronouncements in preparing those statements. The Board recognizes that mutual life insurance enterprises, like a number of other regulated enterprises, prepare financial statements based on regulatory accounting practices that differ from generally accepted accounting principles and issue those financial statements to regulators. This Interpretation concludes that those financial statements should not be described as prepared "in conformity with generally accepted accounting principles."

This Interpretation is effective for financial statements issued for fiscal years beginning after December 15, 1994, except for the disclosure provisions, which are effective for fiscal years beginning after December 15, 1992. Earlier application is encouraged.