Since the new revenue recognition guidance excluded insurance contracts, and the effective date stretches to 2019 for private companies, some insurance companies may not have allocated substantial resources to the evaluation of the new standard. However, many insurance companies, including affiliates within a consolidated group, may have additional revenue streams that are included in the scope of the new standard that must be evaluated.
The new standard is a framework to apply to each contract or portfolio of similar contracts and, therefore, each separate revenue stream will need to be assessed independently.
Our revenue recognition resource guide for insurance services identifies key topics impacting insurance companies and affiliates, including issues related to:
- Claims processing and administration
- Commission agreements
- Policy fees or other charges
- Managed care contracts
- Extended service warranty contracts
- Contracts with multiple promises
- Impacts on balance sheet and taxes
Download our Revenue recognition resource guide for insurance services to help your organization implement the new standard.