The For The Future Liabilities - 985 Words

In general insurance, Insurers make use of data gathered previously out of experience in order to predict the future liabilities. Such an estimate is made through the help of a â€Å"loss function† in decision making, as well as mathematical optimization. It is a common tendency to minimize the loss of the risk models and hence to do so are different methods applicable in today’s statistics. Frequentist expected loss, Bayesian expected loss are mostly used; with Bayesian statistics being the increasingly common methodology in actuarial science. Insurers also make an estimate of the expected claims that arise in the future years, and so they need to hold reserves based on the aggregate claim amount they could face in the near future. Hence one way of doing this is by using the aggregate claim model. Therefore, examining and comparing the different forms of loss distribution that could be used in the aggregate risk model analysis, besides investigating about issues surrou nding the application of Bayesian statistics in such a context. Acknowledgement: I would like to acknowledge my mentor Ms. Preeti Sahay, to have stood as a support for me throughout the project and in providing sufficient information for the project. Introduction: Insurance by nature is an uncertain subject. The Insured events occur at random times, particularly in a general insurance field, thereby the amount of claims are also random. Based on the future ability to pay the claims the insurer has toShow MoreRelatedThe International Accounting Standards Board Essay1703 Words   |  7 Pagesreflect current thinking.† According to Leisenring(2013)â€Å"That assets and liabilities are the fundamental elements of financial statements still is undoubtedly the most controversial, and the most misunderstood and misrepresented, concept in the entire conceptual framework† This essay focus mainly on revised definition of asset and liability , incorporating the discussion of the weakness of current definition about asset and liability, the analysis of proposed definition and demonstration of how the newRead MoreCompany Reporting1285 Words   |  6 PagesTable of Contents 1.0 Introduction 1 2.0 Discussion 2 2.1 Exploration and Development costs creates a Deferred Tax Liability 2 2.2 Analysis on arguments by directors 3 2.2.1 No Income Tax Expenses 3 2.2.2 No deferred tax liability 4 2.2.3 Tax losses 5 2.3 Information utility to users of financial report of deferred tax liabilities 6 3.0 Conclusion 7 References 8 1.0 Introduction Accounting Standard AASB 112 (Income Taxes) prescribe the accounting treatment for income taxesRead MoreMister748 Words   |  3 PagesDeferred tax is an accounting concept, meaning a future tax liability or  asset, resulting from temporary differences between book (accounting) value of  assets and liabilities and their tax value, or  differences between the recognition of gains and losses  in financial statements and their  recognition in a tax computation (FASB). Deferred tax is important in understanding the financial situation of a company’s operation because it provides a more accurate calculation of accrual earnings and accurateRead MoreDefend the Asset/Liability Approach of Accounting for Inter-Period Income Tax Allocation.642 Words   |  3 PagesTeam 2: Defend the asset/liability approach of accounting for inter-period income tax allocation. The asset/liability method of income tax allocation is balance sheet oriented. The intent is to accrue and report the total tax benefit or taxes payable that will actually be realized or assessed on temporary differences when their respective future taxable or deductible amounts are expected to occur. The book states 5 arguments: 1. The balance sheet is becoming more important financial statementRead MoreContingent Liability1011 Words   |  5 Pagescontingent liability A potential liability dependent upon some future event occurring or not occurring. For example, a company is named as a defendant in a $1 million lawsuit. Does that mean the company automatically has a liability of $1 million? What if the lawsuit has no merit and can easily be defended? If it is probable that the company will lose and the amount can be estimated, a journal entry is prepared to debit Loss from Lawsuit and to credit Lawsuit Payable. If it is possible but notRead MoreTemporary Differences1346 Words   |  6 Pagesthat the reported amounts of assets and liabilities will be recovered and settled, respectively. Based on that assumption, a difference between the tax basis of an asset or a liability and its reported amount in the statement of financial position will result in taxable or deductible amounts in some future year(s) when the reported amounts of assets are recovered and the reported amounts of liabilities are settled (SFAC No. 109, par. 11). Income tax liabilities (or assets) can arise when the amountRead MoreCompany Reporting1448 Words   |  6 Pagesare applied for transactions and other events happened inside an entity for accounting and taxation purposes, namely current tax consequences and future tax consequences. The purpose of this report was to identify and analyze the reasoning behind the responsibility of exploration and development costs (ED) for the creation of a deferred tax liability (DTL) and its treatments for both accounting and taxation purposes. Moreover, the analysis was performed with reference to case study of GravattRead MoreBusiness Structure Of The United States1178 Words   |  5 Pagesbusiness structures offered for consideration. Sole proprietorships, partnerships, corporations, and limited liability companies have their advantages and disadvantages. Any new business must evaluate the available business forms to determine which structure will be the most advantageous to the new business. The three most important aspects to determining a business structure are taxation, liability, and growth opportunities (capital mainly). In a scenario involving the creation of the business, the FinalRead MoreFinancial Accounting 31644 Words   |  7 Pagesdifferences. For temporary differences, indicate whether they will create future tax assets or future tax liabilities 1. Advance rental receipts Temporary difference, deferred tax asset 2. Membership costs in a health club Permanent difference 3. Estimated future warranty costs Temporary difference, deferred tax asset 4. Excess of contributions over pension expense Temporary difference, deferred tax liability 5. Expenses incurred in obtaining tax-exempt revenue Permanent difference Read MoreThe International Financial Reporting Standards1461 Words   |  6 PagesReporting Standards (IFRS) identified the five ele-ments of financial statements as the following: (1) assets, (2) liabilities, (3) capi-tal, (4) income, and (5) expenses. The first element, assets, are â€Å"resources controlled by the enterprise as a result of past events, and from which future economic benefits are expected to flow to the enterprise† (IFRS, 2010, pg.17). These future economic benefits may directly or indirectly flow into the company cash assets or cash asset equivalents. Since assets