# ASC 605-944-50: Revenue Recognition — Financial Services—Insurance — 50 Disclosure

Source: FASB Accounting Standards Codification, Basic View

[Read online](https://asc.understandingaccounting.org/asc/605/944/#50-disclosure)

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## ASC 605-944-50: 50 Disclosure

[Read section](https://asc.understandingaccounting.org/asc/605/944/#50-disclosure)

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### Reinsurance Contracts

#### All Reinsurance Contracts

##### [605-944-50-1](https://asc.understandingaccounting.org/asc/605/944/#605-944-50-1)

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All insurance entities shall disclose all of the following in their financial statements:

1.  a
    
    For all [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.") contracts, both of the following:
    
    1.  1
        
        Methods used for income recognition on reinsurance contracts
        
    2.  2
        
        If not reported under paragraph [944-605-45-1](https://asc.understandingaccounting.org/asc/605/944/#605-944-45-1) in the statement of earnings, as separate line items or parenthetically, the amounts of earned premiums ceded and recoveries recognized under reinsurance contracts.
        
2.  b
    
    For short-duration contracts, all of the following on both a written basis and an earned basis:
    
    1.  1
        
        Premiums from direct business
        
    2.  2
        
        Reinsurance assumed
        
    3.  3
        
        Reinsurance ceded.
        
3.  c
    
    For long-duration contracts, all of the following:
    
    1.  1
        
        Premiums and amounts assessed against policyholders from direct business
        
    2.  2
        
        Reinsurance assumed and ceded
        
    3.  3
        
        Premiums and amounts earned.
        
4.  d
    
    For foreign reinsurance accounted for by the [open year method](https://asc.understandingaccounting.org/glossary/o/#open-year-method "A revenue recognition method under which underwriting results of foreign reinsurance are not included in the income statement until sufficient information becomes available to provide reasonable estimates of earned premiums."), all of the following shall be disclosed for each period for which an income statement is presented:
    
    1.  1
        
        The amounts of premiums, claims, and expenses recognized as income on closing underwriting balances
        
    2.  2
        
        The additions to underwriting balances for the year for reported premiums, claims, and expenses.
        
5.  e
    
    The amounts of premiums, claims, and expenses in the underwriting account for each balance sheet presented.

##### [605-944-50-2](https://asc.understandingaccounting.org/asc/605/944/#605-944-50-2)

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Appropriate disclosure of both of the following items is encouraged:

1.  a
    
    The extent to which reinsurance contracts indemnify the [ceding entity](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.") against loss or liability relating to [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.")
    
2.  b
    
    Indemnification policies as part of the required disclosure in the preceding paragraph about the nature and effect of reinsurance transactions.

##### [605-944-50-3](https://asc.understandingaccounting.org/asc/605/944/#605-944-50-3)

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Disclosure in the financial statements of an insurance entity's accounting policies under Topic 250 shall include a description of the methods used to account for foreign reinsurance.

### Financial Guarantee Insurance Contracts

##### [605-944-50-4](https://asc.understandingaccounting.org/asc/605/944/#605-944-50-4)

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To meet the disclosure objective in paragraph [944-20-50-7](https://asc.understandingaccounting.org/asc/944/20/#944-20-50-7), an insurance entity shall disclose all of the following information for each annual period and interim period:

1.  a
    
    For premium revenue recognition that has been accelerated, the amount and reasons for acceleration
    
2.  b
    
    A schedule of the future expected premium revenue as of the latest date of the statement of financial position detailing both of the following:
    
    1.  1
        
        The four quarters of the subsequent annual period and each of the next four annual periods
        
    2.  2
        
        The remaining periods aggregated in five-year increments.