The Accounting Review Vol. 41 No. 1 1966
Income of Life Insurance Companies.
Abstract
This paper has proposed that life insurance companies adopt an accrual basis of accounting for revenues and expenses as contrasted to the present modified cash basis. If the principles discussed above were followed, the published financial reports would provide a more meaningful "profit" figure for the period under consideration as well as other significant information for the use of stock analysts and investors. To round out the discussion, Exhibit A presents comparative Income Statements for the hypothetical New Life Insurance Company. This exhibit compares the income statement as it is presented today with the income statement that might appear if a full accrual program were in operation. These statements are based on some oversimplified assumptions as to type of policy, duration of sales activity, and age composition of the policyholders. Despite the simplicity, the statements significantly demonstrate the differences and highlight the magnitude of the differences over time.
- DOI
- 10.2308/tar-4482902
- Volume
- 41
- Issue
- 1
- Pages
- 98-105
- Language
- en
- Sources
- openalex crossref