The Accounting Standards Board (AcSB) has undertaken a project to provide guidance on the recognition and measurement of the cash surrender value of an insurance contract.
Currently, Accounting Standards for Private Enterprises and Accounting Standards for Not-for-Profit Organizations in Parts II and III, respectively, of the CPA Canada Handbook – Accounting, do not address accounting for cash surrender value of an insurance contract. Stakeholders have informed the AcSB that there is diversity in the accounting for the cash surrender value of an insurance contract.
In November 2023 the AcSB issued the Exposure Draft, “Accounting for Life Insurance Contracts with Cash Surrender Value,” which closes for comment on January 31, 2024.
The project will involve:
- developing recognition and measurement guidance for the cash surrender asset;
- determining presentation requirements for change in cash surrender value and insurance policy payments; and
- identifying disclosure requirements that will ensure adequate information is available to users.