Insight

Illustrative disclosures for insurers adopting ASU 2018-12

The KPMG LDTI Illustrative Disclosures Guide presents one possible format for financial statements of a life insurer applying the requirements of ASU 2018-12

Michael Lammons

Michael Lammons

Partner, KPMG’s Insurance Accounting Change Co-Lead, KPMG US

+1 404-222-3390

Pixi Sofian

Pixi Sofian

Director, Accounting Advisory Services, KPMG US

+1 949-885-5546

Laura Gray

Laura Gray

Principal, KPMG’s Insurance Accounting Change Co-Lead, KPMG US

+1 404-222-3388

On August 15, 2018, the FASB issued ASU 2018-12 to improve financial reporting for insurers that issue long-duration contracts such as life insurance and annuities. The objective of ASU 2018-12 is to improve, simplify, and enhance the financial reporting of long-duration contracts, by providing financial statement users with useful information in a timely and transparent manner. Insurers will need to disclose quantitative information in rollforwards for the liability for future policy benefits, policyholder account balances, MRBs, separate account liabilities and DAC – as well as information about the significant inputs, judgments, assumptions and methods used in measurement.

Our LDTI Illustrative Disclosures Guide provides one format for financial statements of a life insurer applying the requirements of ASU 2018-12. A helpful resource, the guide presents example disclosures for the initial application of ASU 2018-12 for annual financial statements as of December 31, 2023.