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  #1  
Old 07-12-2017, 05:47 PM
koudai8 koudai8 is offline
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Question GAAP vs IFRS for Variable Annuities

I am doing a research project on the similarities and differences on GAAP vs IFRS for Variable Annuities.

I have done some research that can be summed up with "GAAP is more stringent and case based, whereas IFRS is more lenient and principle based".

However, there aren't much information on how variable annuities live in the context of GAAP vs IFRS, let alone detailed explanation to the specific topics such as reserves and deferred acquisition costs.

Luckily, I have a few experts I can ask on this topic.

So here are my questions:

1. What are some directional advice for this research project?

2. What are some topics I should dig deeper in? (So far, I have reserves and DAC).

3. What is your perception of GAAP vs IFRS? Is it comparable? What about variable annuity? This is a key question that I want everyone's inputs.

4. What does it mean to "hedge actuarial reserve"?

5. I should probably read IFRS 4 and SOP 03-1? Any other material I should read?

Thanks guys!
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Old 07-12-2017, 07:01 PM
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Carol Marler
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"What are some directional advice for this research project?"
Who is your principal? Ask them.

"What is your perception of GAAP vs IFRS? Is it comparable?"
The differences seem to be driven mostly by politics and ego. It seems highly unfortunate that the two approaches completely failed in all attempts at convergence. See a whole series of articles in the Financial Reporting Section Newsletters (at SOA.org) regarding the developments in IFRS as they occurred.

"What about variable annuity?"
I'm not sure what you mean by this question. Could you give some further details?
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Old 07-12-2017, 11:18 PM
koudai8 koudai8 is offline
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Quote:
Originally Posted by JMO View Post
"What are some directional advice for this research project?"
Who is your principal? Ask them.

"What is your perception of GAAP vs IFRS? Is it comparable?"
The differences seem to be driven mostly by politics and ego. It seems highly unfortunate that the two approaches completely failed in all attempts at convergence. See a whole series of articles in the Financial Reporting Section Newsletters (at SOA.org) regarding the developments in IFRS as they occurred.

"What about variable annuity?"
I'm not sure what you mean by this question. Could you give some further details?
Thank you for pointing me to the incredibly informative newsletters.

What I meant to ask is your opinion of variable annuities; I have a rough idea of how it works, but I am not very familiar nor comfortable with the inner working of VAs---reporting, DAC and reserving---just to name a few. Can you give a big picture of how I should perceive VAs to gain a deeper understanding?
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Old 07-13-2017, 10:52 AM
RashelHunt RashelHunt is offline
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https://www.soa.org/library/proceedi.../va01-14ts.pdf

https://www.soa.org/library/newslett...87-reback.aspx

I would suggest looking at IFRS and GAAP maybe separately and then seeing where they are similar and then finding difference in that. That may help

Maybe this could help?
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Old 07-15-2017, 04:08 PM
koudai8 koudai8 is offline
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Quote:
Originally Posted by RashelHunt View Post
https://www.soa.org/library/proceedi.../va01-14ts.pdf

https://www.soa.org/library/newslett...87-reback.aspx

I would suggest looking at IFRS and GAAP maybe separately and then seeing where they are similar and then finding difference in that. That may help

Maybe this could help?
Thank you for the resource; it was very helpful.

I have found quite a bit material on GAAP, but less for IFRS. I was wondering if there are good resources on IFRS. I will continue to search (with a focus on SOA.org).

Thanks to everyone who has helped so far!
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Old 07-23-2017, 02:01 PM
Ol' Perfesser Ol' Perfesser is offline
 
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The SOA published a comparison of US GAAP and IFRS that included a sample VA, I think. There are also comment letters from insurers on the IASB website that compare the results for both for a VA product. If you look for a comment letter from the four large insurers on the website, I think it was sent in 2016, you should be able to get some ideas.
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