The Association of British Insurers' (ABI) proposals for an 'accruals' method would have the effect of 'front-loading' profits reported on life assurance business compared with the traditional 'statutory solvency' basis. The ABI argued that adoption of the method would lead to a more realistic...

Revenue recognition and measurement principles can conflict with liability recognition and measurement principles. We explore here under different market conditions when the two measurement approaches coincide and when they conflict. We show that where entities expect to earn ‘super profits’...