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The Actuary The magazine of the Institute & Faculty of Actuaries

Global GAAP

Ernst & Young’s Insurance and Actuarial Advisory Services (IAAS) division has announced highlights and survey results from a recent seminar co-hosted with the Society of Actuaries on international financial reporting standards (IFRS).

Addressing the audience, representatives from both the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) suggested US GAAP accounting standards and IFRS are likely to converge by 2010. US insurance executives attending also saw convergence in the near future, with three-quarters (75%) indicating that they believe IASB and FASB will unify standards within ten years.

The majority attending (66%) believed the IASB will ultimately adopt a fair value model for phase II insurance. Interestingly, a slightly higher percentage personally prefer fair value over current US GAAP (38% vs 34% respectively), and only 13% are leaning towards an embedded value methodology.