This Example illustrates alternative disclosures that an insurance entity could make to meet the requirements of paragraphs .
- Note X. Statutory Accounting Practices
- The Entity's statutory financial statements are presented on the basis of accounting practices prescribed or permitted by the [state of domicile] Insurance Department. [State of domicile] has adopted the National Association of Insurance Commissioners' statutory accounting practices as the basis of its statutory accounting practices, except that it has retained the prescribed practice of writing off goodwill immediately to statutory surplus in the year of acquisition.
- In addition, the commissioner of the [state of domicile] Insurance Department has the right to permit other specific practices that may deviate from prescribed practices. The commissioner has permitted the Entity to record its home office property at estimated fair value instead of at depreciated cost, as required by National Association of Insurance Commissioners' statutory accounting practices.
- The monetary effect on statutory capital and surplus of using accounting practices prescribed or permitted by the [state of domicile] Insurance Department is as follows.
![](\"/asc-img/GUID-C6E3075C-7E04-4174-B659-ECECD8B4DD3C-low.gif\")
December 31 20X2 20X1 $m $m Statutory capital and surplus per statutory financial statements $30.0 $27.9 Effect of permitted practice of recording home office property at estimated fair value (2.5) (2.3) Effect of [state of domicile's] prescribed practice of immediate write-off of goodwill(a) 2.4 2.1 Statutory capital and surplus in accordance with the NAIC statutory accounting practices $29.9 $27.7 (a)\tThis amount compared to the prior year reflects the net impact of an additional year's amortization and the fact that admitted goodwill is based on the level of statutory capital and surplus and thus can fluctuate.