Important Points for IC 26 - Life Insurance Finance Exam
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Capitalisation of Historical Costs Model and Replacement Cost Model are classified as Cost Based Models of HRA.
Opportunity Cost, Discounted Wages and Salaries Approach, Flamholtz Model, Jaggi and Lau Model are classified as Economic Value Models of HRA.
The Hekimian and Jones Model of HRA is known as opportunity cost model.
Revenues and costs are accrued, that is recognised as they are earned or incurred [and not as money is received or paid] and recorded in the financial statements of the periods to which they relate.
Before we move further, we should understand the terms which are used in a Cash Flow Statement.
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