Seeking solutions

In order to be awarded CPD units you must answer the following five random questions correctly. If you fail the test, please re-read the article before attempting the questions again.

  1. What would be the change in the insurance contract liability on transition to the new insurance contracts standard?

  2. What would be the total change in the separate component of equity (accumulated amount of the other comprehensive income)?

  3. What would be the change in retained earnings as a result of the above adjustments?

  4. What would be the contractual service margin at initial recognition?

  5. What would be the insurance liability recognised immediately after initial recognition ie after receipt of the first premium?

  6. What would be the amount of the contractual service margin recognised in profit or loss in year 1?

  7. What would be the directly attributable acquisition costs recognised in year 1?

  8. What would be the insurance contract revenue recognised in year 1?

  9. The IASB has asked for comments on five key areas, which are to be submitted by 25 October 2013. Which of the following is not a key area for comment?

  10. The decision to adjust the contractual service margin for changes in estimates of future cash flows will have an effect on the accounting for insurance contracts. What is the effective impact of this adjustment?