Accounting standards and insurance company accounts Flashcards
(20 cards)
IFRS Foundation
Not-for-profit responsible for developing a single set of high-quality global accounting standards
IFRS Governance model
3 tier model
- Two independent standard setting boards
- Trustees from around the world
- Monitoring board of public authorities
IASB
Independent standard setting board responsible for strategy, funding, and due process
ISSB
Independent standard setting board created to deliver sustainability-related disclosure standards
UK Endorsement Board
IFRS only apply in the UK after being formally endorsed by IFRS
Two assumptions of IFRS
Accrual basis - effect of transactions and other events recognised when they occur
Going concern - financial statements prepared on the basis that an entity will continue in operation for the foreseeable
Usefulness of financial information
Comparable
Verifiable
Timely
Understandable
Financial Policy Committee
BoE committee whose role is to identify monitor and take action to reduce systemic risk and protect UK financial system
IRFS 17
Standardises insurance accounting globally to improve comparability and increase transparency
Contractual service margin
Expected future profit of a contract presented as a value today. ie spreads the profit taken out over the lifetime of the insurance product
Small entity
2 of the following:
- Turnover less than £10.2m
- Total assets less than £5.1m
- 50 employees or less
Micro entity
2 of the following
* Turnover less than £632,000.
* Total assets less than £316,000.
* 10 employees or less.
What is the UK Endorsement Board?
The body that approves IFRS for use in the UK.
What are the two IFRS assumptions?
Accrual basis and going concern.
What is the accrual basis?
Records income and expenses when they occur, not when cash is received or paid.
What is the going concern assumption?
Assumes the business will continue operating in the foreseeable future.
Financial Reporting Council
UK’s main independent regulator of corporate financial reporting and governance
(FRC) The Conduct Committee
Ensures the provision of financial information by public and large private companies complies with reporting requirements
(FRC) Governance Committee’s
People Committee
Audit and Risk Committee
(FRC) Regulatory Committee’s
Regulatory Standards & Codes Committee
Supervision Committee
Conduct Committee
