Important Points for IC 26 - Life Insurance Finance Exam
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Accounting standard 17 which is segment reporting defines segment in terms of business segment and geographical segment.
Accounting standard 18 defines related party disclosures. This standard is applied in reporting related party relationship and transactions between a reporting enterprise and its related parties.
Accounting standard issued by the ICAI are mandatory for insurance companies.
There are basically two methods of preparing cash flow statements, (a) Direct, & (b) Indirect, Out of these, the direct method is specifically used in the case of accounting for insurance companies.
Recording, the substance of the transaction comes under the concept substance over from. According to the accrual system of accounting, expenses should be recorded in the financial statements when there is a decrease in the economic benefits whereas assets should be recorded when economic benefits will flow to the entity.
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