ED 49: the importance of being legal

Article Abstract:

The Law Society has reservations about certain aspects of the Accounting Standards Committee's (ASC) Exposure Draft (ED) 49, Reflecting the Substance of Transactions in Assets and Liabilities, which would give commercial substance effect over legal form. The ASC has intended the ED to form a conceptual framework to provide guidance to preparers of financial statements faced with complex commercial transactions. The Law Society is worried that the proposed standard in its current form would lead to transactions being recharacterized, thus giving rise to conflicts between the legal and accounting analyses of transactions. The Law Society sees the need for the issue of consolidation to be placed within the ED, but it has problems with its definition of control.

Standards, Analysis, Accounting, Law Society, Accounting Standards Committee

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Actuaries v. accountants

Article Abstract:

Actuaries and accountants vary significantly over how to report life insurance company profits, since what actuaries call "reserves," accountants view as a mixture of "reserves" and "provisions." If the "achieved profits method" is proven as compatible with accounting principles, this may open a path to compromise.

United Kingdom, Economic aspects, Reports, Insurance industry, Profits, Life insurance industry, Beliefs, opinions and attitudes, Accountants, Actuaries, Corporate profits

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