FASB has proposed an Accounting Standards Update (ASU) that would amend transition guidance for long-term insurance contracts derecognized because of a sale or disposal of an individual or a group of contracts or legal entities before the effective date.
In August 2018, FASB issued ASU No. 2018-12 to improve, simplify and enhance the financial reporting requirements for long-duration contracts issued by insurance entities.
The amendments in the newly proposed ASU No. 2018-12 require an insurance entity to apply a retrospective transition method at the beginning of the earliest period presented or the beginning of the prior fiscal year if an early application is elected.
FASB encourages stakeholders to review and provide comments on the proposed ASU by Aug. 8. Learn more.