Hi,
Intangible assets standard does not deal with capitalising insurance costs- "over heads that are necessary to generate the asset and that can be allocated on a reasonable and consistent basis to the asset (for example, an allocation of the depreciation of fixed assets, insurance premium and rent)" why allocated? Prepaid insurance is not amortised, but expensed upon expiry or redeemed if there is a financial guarantee (redeemable once can be made as asset).
Revenue standard in AS does not define prepaid expenses.
I tried fair value measurements standard and no luck there.
I tried Indas 119 and- Unconditional receivables and payables are recognised as assets or liabilities when the entity becomes a party to the contract and, as a consequence, has a legal right to receive or a legal obligation to pay cash. maybe this is it !!
Can someone please guide me to the relevant standard, paragraph which will expound how guaranteed benefit is treated in the policyholders books?
CAclubindia
