{"schema_version":2,"canonical_url":"https://asc.understandingaccounting.org/asc/605/944/#30-initial-measurement","source":"FASB Accounting Standards Codification, Basic View","usage":"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.","topic":"605","topic_title":"Revenue Recognition","subtopic":"605-944","subtopic_title":"Financial Services—Insurance","section":{"number":"30","label":"30 Initial Measurement","anchor":"30-initial-measurement","is_sec":false,"groups":[{"block":"Long-Duration Contracts","heading":"Universal Life-Type Contracts with Death or Other Insurance Benefit Features","paragraphs":[{"citation":"605-944-30-1","para":"30-1","html":"<div class=\"asc-body\"><div class=\"norm-text\">A liability for unearned revenue to be recognized under paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/605/944/#605-944-25-5\" class=\"xref\">944-605-25-5 through 25-7</a></div> and <div class=\"xref-range displayInline\"><a href=\"/asc/605/944/#605-944-25-9\" class=\"xref\">944-605-25-9 through 25-10</a></div> shall be measured initially as <span class=\"sfragment\" id=\"sfr_07AE69B1-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">the portion of such assessments that compensates the insurance entity for benefits to be provided in future periods. </span></span></div></div>","snippet":"A liability for unearned revenue to be recognized under paragraphs 944-605-25-5 through 25-7 and 944-605-25-9 through 25-10 shall be measured initially as the portion of such assessments that compensates the insurance en…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a552d9407514c3f9fb305c21dc64c4d4dfbd27bffd943cd31b3950ce9281cb96","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"citation":"605-944-30-2","para":"30-2","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07AE6EF9-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">For contracts in which assessments are collected over a period significantly shorter than the period for which the contract is subject to <a href=\"/glossary/m/#mortality\" class=\"term\" title=\"The relative incidence of death in a given time or place.\"><span>mortality</span></a> and <a href=\"/glossary/m/#morbidity\" class=\"term\" title=\"The relative incidence of disability due to disease or physical impairment.\"><span>morbidity</span></a> risks, the assessment would be considered a <a href=\"/glossary/f/#front-end-fees\" class=\"term\" title=\"See Initiation or Front-End Fees.\"><span>front-end fee</span></a> and accounted for under paragraphs <div class=\"xref-range displayInline\"><a href=\"/asc/605/944/#605-944-25-6\" class=\"xref\">944-605-25-6 through 25-7</a></div>. </span></span><span class=\"sfragment\" id=\"sfr_07AE705F-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The amounts amortized into income shall be considered assessments for purposes of this paragraph. </span></span></div></div>","snippet":"For contracts in which assessments are collected over a period significantly shorter than the period for which the contract is subject to mortality and morbidity risks, the assessment would be considered a front-end fee …","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:f426a3d19c85bb56d5d99db1f522fa5b4ecc80e69e97384939d43a5796afd9a8","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c1dab17568736d2ff9ff64bf58cc5d914dc16e9c4aefc22e7059590be423065f","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"block":"Long-Duration Contracts","heading":"Limited-Payment Contracts","paragraphs":[{"citation":"605-944-30-2A","para":"30-2A","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07AE71B3-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Assumptions used in measuring any <a href=\"/glossary/g/#gross-premium\" class=\"term\" title=\"The premium charged to a policyholder for an insurance contract. See also Net Premiums.\"><span>gross premium</span></a> deferred in accordance with paragraph <a href=\"/asc/605/944/#605-944-25-4A\" class=\"xref\">944-605-25-4A</a> (that is, the deferred profit liability) shall be consistent with those used in estimating the <a href=\"/glossary/l/#liability-for-future-policy-benefits\" class=\"term\" title=\"An accrued obligation to policyholders that relates to insured events, such as death or disability.\"><span>liability for future policy benefits</span></a> as described in paragraph <a href=\"/asc/944/40/#944-40-30-7\" class=\"xref\">944-40-30-7</a>. </span></span></div></div>","snippet":"Assumptions used in measuring any gross premium deferred in accordance with paragraph 944-605-25-4A (that is, the deferred profit liability) shall be consistent with those used in estimating the liability for future poli…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:d0ca2a06422ba60ac6ecf32012b283ec65c1eea0bb003a60bd742de89ae9a305","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:e0fcecdff6cb18379ea74724d0cbc5976600b07d029c8602502da310cc1f0d06","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"block":"Long-Duration Contracts","heading":"Retrospective and Contingent Commission Arrangements","paragraphs":[{"citation":"605-944-30-3","para":"30-3","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07AE7300-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The liability recognized under paragraph <a href=\"/asc/605/944/#605-944-25-14\" class=\"xref\">944-605-25-14</a> shall be </span></span><span class=\"sfragment\" id=\"sfr_07AE74AB-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">based on experience and the provisions of the contract. </span></span></div></div>","snippet":"The liability recognized under paragraph 944-605-25-14 shall be based on experience and the provisions of the contract.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:1af4e8deb97c13fcbf4ad88e07b1cfa5489ce128fed0e94112c2ee21ecd260a9","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:2d9abbd08f4ec58473a280a31da339d826785b8472b5c2c0dc470607103fb30c","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"block":"Reinsurance Contracts","heading":"Reinsurance of Long-Duration Contracts","paragraphs":[{"citation":"605-944-30-4","para":"30-4","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07B5886C-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">The difference, if any, between amounts paid for a <a href=\"/glossary/r/#reinsurance\" class=\"term\" title=\"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.\"><span>reinsurance</span></a> contract and the amount of the liabilities for policy benefits relating to the underlying reinsured contracts is part of the estimated cost to be amortized. </span></span></div></div>","snippet":"The difference, if any, between amounts paid for a reinsurance contract and the amount of the liabilities for policy benefits relating to the underlying reinsured contracts is part of the estimated cost to be amortized.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:c8c22e960f6abaf59552d481411c9e7fd542f748182d37781b019cf6fec4cb1f","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}}],"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:a19e4e96e5223ca726fa1bdd7b02924bcad36e9d515cc0e2a6630f96ebb5b5d5","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"block":"Financial Guarantee Insurance Contracts","heading":null,"paragraphs":[{"citation":"605-944-30-5","para":"30-5","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07C14CE7-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><span class=\"principle\">Initial measurement of the unearned premium revenue recognized under paragraph <a href=\"/asc/605/944/#605-944-25-25\" class=\"xref\">944-605-25-25</a> shall be equal to the present value of either of the following:</span></span></span><ol class=\"ol-norm\"><li class=\"li-norm\"><span class=\"linum\">a</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_07C14E95-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><span class=\"principle\">If the criteria in paragraph <a href=\"/asc/310/944/#310-944-30-3\" class=\"xref\">944-310-30-3</a> are met and used, the premiums expected to be collected over the period of the financial guarantee insurance contract</span></span></span></div></li><li class=\"li-norm\"><span class=\"linum\">b</span><div class=\"p\"><span class=\"sfragment\" id=\"sfr_07C1504C-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\"><span class=\"principle\">If the criteria in paragraph <a href=\"/asc/310/944/#310-944-30-3\" class=\"xref\">944-310-30-3</a> are not met, the premiums due.</span></span></span></div></li></ol></div></div>","snippet":"Initial measurement of the unearned premium revenue recognized under paragraph 944-605-25-25 shall be equal to the present value of either of the following:\n(a) If the criteria in paragraph 944-310-30-3 are met and used,…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:dc7378f2f1c7500919f0387dc399db521f6e3b70223ca3abd42d00dd71a5c9c3","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"citation":"605-944-30-6","para":"30-6","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07C151B5-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If the premium is a single premium received at the inception of the financial guarantee insurance contract, the insurance entity shall initially measure the unearned premium revenue at the amount received.</span></span></div></div>","snippet":"If the premium is a single premium received at the inception of the financial guarantee insurance contract, the insurance entity shall initially measure the unearned premium revenue at the amount received.","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:22abafa39eba86d812a3f275e01cc7235bdf2899cb78fb0df55d40daa746fdea","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval timestamps","source_key":"1943274/2147477897","source_sha256":"ca496db8410a12fc67cf79ddfe8b13ad4733abc788847cba37156b4d6dfb893d"}},{"citation":"605-944-30-7","para":"30-7","html":"<div class=\"asc-body\"><div class=\"norm-text\"><span class=\"sfragment\" id=\"sfr_07C1531B-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">If the premiums are received as payments over the period of the financial guarantee insurance contract, the insurance entity shall initially measure the unearned premium revenue at an amount equal to the present value of the premiums due or expected to be collected over the period of the financial guarantee insurance contract. </span></span>Example 1 (see paragraph <a href=\"/asc/605/944/#605-944-55-16\" class=\"xref\">944-605-55-16</a>) illustrates the application of this paragraph. <span class=\"sfragment\" id=\"sfr_07C15479-6E94-1014-A13F-6E4B94C84136\"><span class=\"sfragment-source\">Paragraph <a href=\"/asc/310/944/#310-944-30-2\" class=\"xref\">944-310-30-2</a> provides guidance on the discount rate and the period used. </span></span></div></div>","snippet":"If the premiums are received as payments over the period of the financial guarantee insurance contract, the insurance entity shall initially measure the unearned premium revenue at an amount equal to the present value of…","pending":false,"provenance":{"source_url":"https://asc.fasb.org/","snapshot_version":"sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f","record_version":"sha256:03bfb861cdba49bf3611724bca3b766e01e1e4740af45831d497973689d92556","downloaded_from":"2026-09-10T00:49:31.248Z","last_downloaded_at":"2026-09-10T00:49:31.248Z","date_scope":"source_page","effective_as_of":null,"effective_as_of_status":"Not established by retrieval 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