Originally Posted by cappu
Thx for your reply. Yeah, the sum of Profit CFs dese is irrelevant of res streams but not the PV of profits. Actually, emergency of res will affect PV of profit but PV of prem that Profit Margin is subject to change.
More seriously, since you PMed me: certainly on a Stat basis, the timing will affect the PM% due to discounting.
But once you've established that PM% (e.g., 9.23% in the book, discounting with the expected investment earnings rate of 7%) to use in setting the GAAP Balance Sheet, you can see that the GAAP Book Profit (as % of Premium) is set up to time itself to be consistent with that PM%.
Change your discount rate or timing of stat reserve changes, and you will have to resolve your GAAP balance sheet. Of course, if either changes later on [for FAS60] after you issued and set up GAAP, you're screwed (can't unlock or resolve GAAP).