# ASC 340-30-15: Other Assets and Deferred Costs — Insurance Contracts That Do Not Transfer Insurance Risk — 15 Scope and Scope Exceptions

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/340/30/#15-scope-and-scope-exceptions)

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## ASC 340-30-15: 15 Scope and Scope Exceptions

[Read section](https://asc.understandingaccounting.org/asc/340/30/#15-scope-and-scope-exceptions)

SEC content: no

#### Overall Guidance

##### [340-30-15-1](https://asc.understandingaccounting.org/asc/340/30/#340-30-15-1)

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This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 340-10-15, with specific qualifications and exceptions noted below.

#### Entities

##### [340-30-15-2](https://asc.understandingaccounting.org/asc/340/30/#340-30-15-2)

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The guidance in this Subtopic applies to the following entities:

1.  a
    
    The insured and the insurer in an insurance contract
    
2.  b
    
    The [ceding](https://asc.understandingaccounting.org/glossary/c/#ceding-entity "The party that pays a reinsurance premium in a reinsurance transaction. The ceding entity receives the right to reimbursement from the assuming entity under the terms of the reinsurance contract.") and [assuming entity](https://asc.understandingaccounting.org/glossary/a/#assuming-entity "The party that receives a reinsurance premium in a reinsurance transaction. The assuming entity (or reinsurer) accepts an obligation to reimburse a ceding entity under the terms of the reinsurance contract.") in a [reinsurance](https://asc.understandingaccounting.org/glossary/r/#reinsurance "A transaction in which a reinsurer (assuming entity), for a consideration (premium), assumes all or part of a risk undertaken originally by another insurer (ceding entity). For indemnity reinsurance, the legal rights of the insured are not affected by the reinsurance transaction and the insurance entity issuing the insurance contract remains liable to the insured for payment of policy benefits. Assumption or novation reinsurance contracts that are legal replacements of one insurer by another extinguish the ceding entity's liability to the policyholder.") contract.

#### Transactions

##### [340-30-15-3](https://asc.understandingaccounting.org/asc/340/30/#340-30-15-3)

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The guidance in this Subtopic applies to the following kinds of insurance and reinsurance contracts:

1.  a
    
    Short-duration insurance and reinsurance contracts that do not transfer [insurance risk](https://asc.understandingaccounting.org/glossary/i/#insurance-risk "The risk arising from uncertainties about both underwriting risk and timing risk. Actual or imputed investment returns are not an element of insurance risk. Insurance risk is fortuitous; the possibility of adverse events occurring is outside the control of the insured.") as described in paragraph [720-20-25-1](https://asc.understandingaccounting.org/asc/720/20/#720-20-25-1) and, for reinsurance contracts, as described in Section 944-20-15
    
2.  b
    
    Multiple-year insurance and reinsurance contracts that do not transfer insurance risk or for which insurance risk transfer is not determinable.

##### [340-30-15-4](https://asc.understandingaccounting.org/asc/340/30/#340-30-15-4)

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The guidance in this Subtopic does not apply to the following transactions and activities:

1.  a
    
    Long-duration life and health insurance contracts that do not indemnify against mortality or morbidity risk shall be accounted for as investment contracts under Topic 944. Therefore, such contracts are not covered by this Subtopic.