Chapter 34 - Reporting Results

Question 1

Accounting concepts

Answer 1

Vary between countries

Movement towards fair values rather than prudence

Question 2

Interpret accounts

Attention to

Answer 2

Accounting rules, guidance, practice concerned
Prepared on going concerned basis
Changes in accounting practice

Question 3

Interpret accounts

Reports accompanying accounts provide commentary on

Answer 3

Performance against key objectives
Investment strategy and performance
Progress against long and short term strategic goals
Attitude to risk, key risk faced, risk management and mitigation
Governance arrangements, including independence of the board

Question 4

Insurance companies

Answer 4

Cyclical effects
Strength of Provisioning basis

Analyzed using rations: 
Expense ratio
Commission ratio
Operating ratio
Ratio of outward reinsurance premiums to gross premiums

Question 5

Banks

Answer 5

Probability of default and loss given default measures for assessing quality of banks loan portfolio

Question 6

Benefit schemes

Disclosures to beneficiaries

Answer 6

Benefit entitlements
Contributiom obligations
Expense charges
Investment strategy
Risks involved
Treatment of entitlements in the event of insolvency

Question 7

Benefit schemes

Disclosures in accounts

Common aims

Answer 7

Recognizing realistic costs of accruing benefits
Avoid distortions form fluctuations in the flow of contributions from employer to pension scheme
Consistency in accounting treatment
Disclosure of appropriate information

Question 8

Benefit schemes

Disclosures in accounts

Disclosures me be needed include

Answer 8

Assumptions
Actuarial method
Value of liabilities accruing over year
Increase in last service liabilities over year
Investment return achieved on assets over year
Surplus or deficit and change in this figure over year
Benefit cost over year
Membership movements