# ASC 505-944-55: Equity — Financial Services—Insurance — 55 Implementation Guidance and Illustrations Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/505/944/#55-implementation-guidance-and-illustrations) Study and research edition. Verify current requirements with the official source. Summaries, enrichment, and tags are machine-generated study aids. Paragraph html preserves source markup; snippet is abbreviated. Pending content is not necessarily effective. Tables and mathematical or amendment markup are retained as HTML where Markdown would lose structure. Source downloaded (UTC): 2026-09-10T00:40:38.943Z to 2026-09-10T00:40:38.943Z Record version: sha256:02cbd0d548f5f17abfd95741dd0a24f17943a3e9b0dd8bc7411e126d114e69a8 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 505-944-55: 55 Implementation Guidance and Illustrations [Read section](https://asc.understandingaccounting.org/asc/505/944/#55-implementation-guidance-and-illustrations) SEC content: no #### Illustrations ##### [505-944-55-1](https://asc.understandingaccounting.org/asc/505/944/#505-944-55-1) Pending content: no Source downloaded (UTC): 2026-09-10T00:40:38.943Z to 2026-09-10T00:40:38.943Z Record version: sha256:a41bde3abab0dc544cf2904dabdbded28bd1b94f97c4e8056e1d06600f6d93b7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates disclosures that an insurance entity could make to meet the requirements of paragraphs [944-505-50-2 through 50-6](https://asc.understandingaccounting.org/asc/505/944/#505-944-50-2) . - 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 \[state of domicile\] 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. This accounting practice increased statutory capital and surplus by $2.5 million and $2.3 million at December 31, 20X2 and 20X1, respectively, over what it would have been had the permitted practice not been allowed. The Entity's statutory capital and surplus, including the effects of the permitted practice, was $30.0 million and $27.9 million at December 31, 20X2 and 20X1, respectively. - Had the Entity amortized its goodwill over 10 years and recorded its home office property at depreciated cost, in accordance with National Association of Insurance Commissioners' statutory accounting practices, the Entity's capital and surplus would have been $29.9 million and $27.7 million at December 31, 20X2, and 20X1, respectively. ##### [505-944-55-2](https://asc.understandingaccounting.org/asc/505/944/#505-944-55-2) Pending content: no Source downloaded (UTC): 2026-09-10T00:40:38.943Z to 2026-09-10T00:40:38.943Z Record version: sha256:e46b5b013879003543375db2ce2931cf3f01d8f1f582d7c7d5160d1943008320 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Example illustrates alternative disclosures that an insurance entity could make to meet the requirements of paragraphs [944-505-50-2 through 50-6](https://asc.understandingaccounting.org/asc/505/944/#505-944-50-2) . - 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. - ![](https://asc.understandingaccounting.org/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) This 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.