IAS 17 and Insurance: Difference between pages

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1.
1. ''Risk management - transferring & pooling risk - commercial.''


International Accounting Standard 17, dealing with leases.
A contract designed to provide protection against specified types of risk or loss, by paying out to the insured party in the event that the insured loss occurs.
Insurance is generally provided by specialist insurance companies, to whom an insurance premium is paid by the insured in advance.


IAS 17 requires finance lease liabilities to be accounted for 'on balance sheet'.


It also requires the appropriate allocation of the total lease instalments between finance charges and reduction of the outstanding lease liability.
2. ''Risk management - transferring & pooling risk - commercial.''


The act or structure of providing insurance on a commercial basis, or of buying it.


2.


Under IAS 17 the total finance charge should be spread in such a way as to produce a constant periodic rate of interest on the remaining balance of the liability.
3. ''Risk management - market stability - regulation.''


However, IAS 17 also allows for some form of approximation to be used to simplify the calculation.
The actions or structures of a regulator or supervisor to ensure market stability, whether or not they are provided on commercial terms.


Fully accurate calculation bases for spreading the total finance charge include the Actuarial method.
For example, the liquidity insurance provided by the Bank of England in acting as a lender of last resort for banks and other financial market participants.


The Sum of the digits method is simpler to apply, and will normally produce a close approximation.  
Retail deposit insurance is another example.




== See also ==
== See also ==
* [[Actuarial method]]
* [[After the event insurance]]
* [[ED 2010/9]]
* [[Assurance]]
* [[Finance charge]]
* [[Captive insurance company]]
* [[Finance lease]]
* [[Chartered Insurance Institute]]
* [[International Financial Reporting Standards]]
* [[Credit insurance]]
* [[Off-balance sheet finance]]
* [[Deposit insurance]]
* [[Operating lease]]
* [[European Insurance and Occupational Pensions Authority]]  (EIOPA)
* [[SSAP 21]]
* [[Excess]]
* [[Sum of the digits]]
* [[Financial Conduct Authority]]
* [[Fixing instrument]]
* [[Force majeure]]
* [[GI]]
* [[Hedging]]
* [[HMO]]
*[[International Association of Insurance Supervisors]]  (IAIS)
* [[ILS]]
* [[Insurable]]
* [[Insurance Capital Standard]]
* [[Insurance risk]]
* [[Insure]]
* [[Lender of last resort]]
* [[Liability insurance]]
* [[Liquidity insurance]]
* [[National Insurance]]
* [[Net-Zero Insurance Alliance]]
* [[Option]]
* [[Premium]]
* [[Price walking]]
* [[Principles for Sustainable Insurance]]
* [[Regulation]]
* [[Reinsurance]]
* [[Risk]]
* [[Risk management]]
* [[Risk response]]
* [[Supervision]]
* [[Trade credit insurance]]
* [[Transfer]]
* [[Trustee liability insurance]]
* [[Underwriting]]


[[Category:Accounting,_tax_and_regulation]]
[[Category:Financial_risk_management]]

Revision as of 10:54, 6 July 2022

1. Risk management - transferring & pooling risk - commercial.

A contract designed to provide protection against specified types of risk or loss, by paying out to the insured party in the event that the insured loss occurs.

Insurance is generally provided by specialist insurance companies, to whom an insurance premium is paid by the insured in advance.


2. Risk management - transferring & pooling risk - commercial.

The act or structure of providing insurance on a commercial basis, or of buying it.


3. Risk management - market stability - regulation.

The actions or structures of a regulator or supervisor to ensure market stability, whether or not they are provided on commercial terms.

For example, the liquidity insurance provided by the Bank of England in acting as a lender of last resort for banks and other financial market participants.

Retail deposit insurance is another example.


See also

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