Life Insurance Company Asset Accounting Research

The main question discussed in this paper is the accounting ofInsurance Assets, that is, the Recognition, Measurement and Disclosureof Insurance Assets. Insurance assets, refers to the resources come fromthe past transaction and own by insurance companies, this resource isexpected to bring the economic benefits to the company in the future. Aswe all known, since 1930s, the theory of Income was the core of modernaccounting theory. In the traditional income theory, the income wasregarded as the result of matching between the confirmed income and therelevant cost, But under today's new economic background, thistraditional income theory seems to be too conservative to meet the needof the new economic environment. So, in this case, we should considerthe new income theory----the Comprehensive Income Theory. TheComprehensive Income refers to the change of the net assets emerging intrade or other items and situation beyond the enterprise owner withinenterprise report period. The measurement of comprehensive income wasbased on the asset and liability method. To measure the comprehensiveincome, we must measure not only the net income in the currentaccounting system, but also the change of equity caused by the othertransactions, such as, the price's change of holding assets, the change ofthe investment assets' value and so on. So the main question discussed inthis paper is the Recognition, Measurement and Disclosure of InsuranceAssets under the background of Comprehensive Income Theory. Becauseof the particularity of Insurance industry, Comprehensive Income Theoryis more suitable to Insurance industry than to other industry. To measurethe comprehensive income, we must calculate the fair value of both assetsand liabilities. The paper consists of four chapters. The first chapter: the Comprehensive Income Theory. The essence ofthe assets is the economic benefits of the future. The theory of thetraditional income views incomes as the result of the matching betweenthe put and output. And the theory of the comprehensive income viewsincome is the increase of the material wealth. So, the theory of thecomprehensive income can reflect the essence of the assets more better.We introduce the theory of the comprehensive income in order to have ajust and more sound appraisal of enterprise's assets value of the insurancecompany in the era of knowledge-driven economy, and offer theinformation more useful help the user of accounting statement to makedecision. Chapter one of this paper tries hard to make a comparativelyexhaustive explanation to the comprehensive income theory, and combinethe characteristic of life insurance to discuss the feasibility of the use ofcomprehensive income theory in China, and offer a foundation toresearch the problem of recognition, measurement and disclosure ofinsurance assets. The second chapter: the recognition of insurance assets. Comparedwith recognition of the other enterprises' assets, the recognition of theinsurance assets also must meet the general principle of the assetsrecognition : Economic benefits , reality , validity and controlling. Butthere are several specific projects need to be discussed further. One isgoodwill. The goodwill is divided into two parts: purchasing from theoutside and achieving by oneself. Under the view of the traditionalincome, the recognition of the assets demands to have existence of therealistic trade activity, so in this case, only the goodwill purchased fromoutside can be confirmed . But under the comprehensive income theory,economic benefits or profit ability becomes basic standard of assetsconfirm, trade activity has not been the only basis of assets confirm nolonger. Goodwill achieving by oneself bring the economic benefits offuture to enterprises as the goodwill purchasing from outside, so we alsoshould confirm it. Another one is policy loan. After some time and metcertain condition, the insurer can apply for the policy loan from insurancecompany. The loan that the insurer offers stems from the cash value of theinsurance life policy, and the cash value of the in...