FASB, IASB Still Dickering Over Insurance Standards

"The project is highly controversial, and the decision to delay was likely influenced by vocal opposition from investors and the industry, as well as by the difficulty in reconciling the two boards' views," Enman writes in a commentary on the decision to push back the completion deadline.

Even if IASB completes a standard by mid-2012, the earliest IFRS implementation date would be in 2015 or later, Enman says.

FASB probably will not have any final standard ready until the latter half of 2012, at the earliest, he says.

Any standards change is unlikely to affect Moody's ratings unless "the new accounting model is deemed so unhelpful to investors that it reduces the industry's access to capital markets," Enman says.

Enman says some of the matters still open for discussion include:

• An IASB deferred acquisition cost (DAC) proposal that is more conservative than DAC rules FASB recently completed.
• Proposals to require a company to use a discount rate that reflects the characteristics of the liabilities assumed rather than the characteristics of the assets supporting the liabilities.
• An IASB push to have companies mark liabilities to current value and reflect that adjustment in net income each period. FASB is considering letting companies report changes that result from interest-rate fluctuations in the less closely watched "other comprehensive income" rather than in net income.
• Proposals for presenting income statements in terms of "margins," or changes in income components, rather than the underlying values that are changing. Critics complain that the margin-based approach would shove premium revenue, claims expenses and other figures that have been included in U.S. GAAP income statements for decades out into the supplemental information.

- Allison Bell

Other IASB coverage from National Underwriter Life & Health:

• IASB, FASB Might Complete Insurance Standard in 2012
• IASB Surveys Public About Insurance Standard Timeline
• Accounting Experts Anticipate Massive Changes
• IASB: Measure Life Settlements At Fair Value
• IASB Seeks Comments On Pension Accounting Draft