A) recoveries receivable and operating assets be recorded at historical cost.
B) financial assets within the scope of AASB 9 be measured at depreciated net market value at balance date and recoveries receivable be at their nominal amount.
C) financial assets within the scope of AASB 9 be measured at fair value through profit and loss on first application of this standard, or on initial recognition.
D) deferred acquisition costs and recoveries receivable be measured at their discounted present value.
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A) They include commission or brokerage paid to agents to attract business. They should be deferred as an asset and systematically amortised over the period of expected benefit.
B) They include brokerage and legal fees paid in advance of the purchase of land. They should be deferred and included in the cost of the land.
C) They include the purchase of client lists and policy details from agents. They should be capitalised as an intangible asset and revalued at balance date.
D) They include brokerage and legal fees paid in advance of the purchase of land. They should be deferred and included in the cost of the land and they include the purchase of client lists and policy details from agents. They should be capitalised as an intangible asset and revalued at balance date.
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A) As premiums become due and payable, the revenue should be recognised according to accrual principles.
B) In accordance with the pattern of past receipts from policies of a similar type.
C) Based on the discounted cash flows expected to be associated with the policy, using past experience of policies that are in the same category.
D) Based on the pattern of the incidence of risk to which the insurer is exposed.
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A) true and understandable.
B) true and fair.
C) true and reasonable.
D) true and correct.
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A) Premium that has not been recognised in the statement of comprehensive income is premium that is unearned and shall be recognised in the statement of financial position as an unearned premium liability.
B) The outstanding claims liability may be discounted for the time value of money using government bond rates that match the structure and term of the future obligations.
C) The expected future payments include: (a) unpaid reported claims; (b) claims incurred but not reported; (c) claims incurred but not enough reported; and (d) acquisition costs.
D) An outstanding claims liability shall be recognised in respect of direct business and reinsurance business and shall be measured as the central estimate of the present value of the expected future payments for claims incurred with an additional risk margin to allow for the inherent uncertainty in the central estimate.
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A) the robustness of valuation models used.
B) past experience of the insurer and the industry.
C) the reliability and volume of data.
D) all of the given answers.
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A) the prohibition against netting reinsurance receivables against claims liabilities.
B) the requirement to mark investments to market and reflect the changes in the statement of comprehensive income.
C) the requirement to report premium revenues gross.
D) the requirement to discount future claim liabilities at the market-determined, risk-adjusted discount rate for the entity.
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A) Some volatility will remain with the required application of AASB 140.
B) This volatility will be completely removed when the IASB complete their Insurance Project.
C) The introduction of the requirement to apply AASB 9 will introduce further volatility to the accounts.
D) Some volatility will remain with the required application of AASB 140 and the introduction of the requirement to apply AASB 9 will introduce further volatility to the accounts.
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A) $72 467 per month
B) $200 000 in March, $150 000 in July, $54 167 in each other month
C) $83 333 per month.
D) $444 444 in March, $333 333 in July and $22 222 in each other month
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A) the revenue and premiums be set-off so that the net revenue only is recorded as this reflects the risk borne by the direct insurer.
B) the gross revenue be reflected in the accounts but a provision for reinsurance premiums be created and set-off against the policy revenue.
C) the net amount of premium (gross premium revenue less amounts transferred to the reinsurer) be recognised but a note disclosing both the gross amount of revenue and the premiums transferred to the reinsurer be provided.
D) the full amount of revenue received by the direct insurer be recognised and the portion of the premiums ceded to the reinsurer treated as an expense.
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A) requirement that premium revenue and insurance liabilities be recognised on the commencement of a contract of insurance
B) requirement that, in estimating the present value of liabilities, future cash flows be discounted using high quality corporate bond rate
C) requirement that companies subject to the standard disclose a 10-year claims-development table that includes past estimates of claims on an undiscounted basis as well as the actual costs of settling claims
D) requirement that insurance liabilities be valued at a level of sufficiency of at least 75 per cent, as required by APRA's prudential standards
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A) weighted average cost of financing for the particular insurer.
B) market-determined risk-adjusted rate of return for the particular insurer.
C) risk-free discount rates based on current observable and objective rates.
D) high quality corporate bond rates.
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