management and external strategies (e.g. pricing, product offering, raising capital) of such financial reporting, and if any disclosure is made it would be extremely subjective, of doubtful value in improving transparency, and should be in notes/supplementary disclosures not in the primary financial statements. A particular concern was the acceleration of profit emergence under fair value models.
Our overall review comment: Unfortunately it is hard to interpret the significance of these survey results. In particular the authors refer (at p. 33) to the increasing number of European life insurers who are making use of embedded value based methodologies and to the improvements now agreed by the CFO Forum in the ‘EEV’ principles (as we discuss in section 6a) above). No reconciliation/explanation is given of the companies’ apparently inconsistent attitudes (e.g. by explaining how ‘fair value’ is thought to differ from ‘EEV’).
Abbreviations** (to follow)
Glossary** (to follow)
9. References Abbott, W.M. (1999), ‘Fair value of life insurance liabilities: an indirect approach’ British Actuarial Journal 5: at pp. 330-338 ABI (2001), Supplementary Reporting for Long Term Insurance Business (The Achieved Profits Method, December http://www.abi.org.uk/Display/File/88/APM-DECEMBER_2001_- _FINAL_VERSION.doc ABI (2003), SORP: Accounting for Insurance Business (issued December 1998, revised November 2003) http://www.abi.org.uk/Display/File/364/FINAL_VERSION_AS_PUBLISHE D.pdf Altenburger,O.A. (2005), ‘IFRS4 Insurance Contracts – improved insurance accounting?’, University of Vienna working paper presented at the 28th European Accounting Association Annual Congress, Göteborg, Sweden: 18th
20th May 2005.
APB (2004), Bulletin 2004/5: Supplementary guidance for auditors of insurers in the
United Kingdom (Revised), December 2004 (available at: http://www.frc.org.uk/apb/publications/pub0736.html ) Arnold, J., Egginton, D., Kirkham, L., Macve, R. and Peasnell, K. (1992), Goodwill
and Other Intangibles: Theoretical Considerations and Policy Issues (ICAEW). ASB (1997), FRS10 Goodwill and Intangible Assets (December) ASB (1998), FRS12 Provisions, Contingent Liabilities and Contingent Assets
(September) ASB (2004a), FRED34 Life Assurance (July)