The FASB undertook the insurance project with the objective of making targeted improvements to the existing recognition, measurement, presentation, and disclosure requirements for long-duration contracts issued by an insurance company.

During the FASB’s outreach, stakeholders—including investors and other financial statement users—indicated that the insurance accounting model did not provide sufficient decision-useful information in a timely or a transparent manner.

To address these issues, the amendments in FASB Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts:
  1. Improve the timeliness of recognizing changes in the liability for future policy benefits and modify the rate used to discount future cash flows
  2. Simplify and improve the accounting for certain market-based options or guarantees associated with deposit (or account balance) contracts
  3. Simplify the amortization of deferred acquisition costs
  4. Improve the effectiveness of the required disclosures.
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Technical Inquiries

Submit questions about applying the new requirements through the FASB’s Technical Inquiry System.