CIA.Subseq

Question 1

Define calculation date

Answer 1

Effective date of calculation

(ex.: for financial statements, the calculation date would be the balance sheet date)

Question 2

Define report date

Answer 2

Date on which the actuary completes the report on his/her work.

Question 3

Briefly explain what it means to report.

Answer 3

Actuary’s oral or written communication to users about his/her work.

Question 4

Define the term subsequent event.

Answer 4

An event (of which an actuary first becomes aware) after the calculation date but before the corresponding report date.

Question 5

Define the term adjusting event.

Answer 5

Event (after calculation date) that provides evidence of condition existing at calculation date.

Note: adjustments in calculations/reporting are required.

Question 6

Define the term non-adjusting event.

Answer 6

Event indicative of conditions arising after calculation date.

Note: adjustments to calculations/reporting are not required.

Question 7

Briefly explain the prime consideration when applying the subsequent event decision tree.

Answer 7

PRIME CONSIDERATION: is the event material?
- if not material then usually no action is required
- but sometimes it’s still beneficial to disclose the event

Question 8

Identify the 4 questions to ask in the middle branch of the decision tree.

Answer 8

1. Was the event due to an error or omission?
2. Did event occur on or before calc date?
3. Does event make entity different on or before calc date?
4. Is the purpose to report on that event?

If answer is yes to one of those questions then reflect in calculation. Otherwise, disclose it but not need to reflect in calculation.

Question 9

Identify the 2 questions to ask in the right branch of the decision tree.

Answer 9

1. Would event has been reflected if it was a subsequent event?
2. Does the event invalidate the report?

If answer is yes, then withdraw report and amend. Otherwise, no actions needed.