# ASC 805-944-30: Business Combinations — Financial Services—Insurance — 30 Initial Measurement Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/805/944/#30-initial-measurement) 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): 2026-09-10T01:26:53.577Z to 2026-09-10T01:26:53.577Z Record version: sha256:e4192c61988aa1c6e320a1c8ae9710f18e7315211f35a44481ecaf819b147c62 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 805-944-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/805/944/#30-initial-measurement) SEC content: no #### Insurance and Reinsurance Contracts Acquired ##### [805-944-30-1](https://asc.understandingaccounting.org/asc/805/944/#805-944-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:53.577Z to 2026-09-10T01:26:53.577Z Record version: sha256:daa0c4f0dd96faaa86d6487ce05891e97173b5f3ea29f03da3307b4d88faeed7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The acquirer shall measure at [fair value](https://asc.understandingaccounting.org/glossary/f/#fair-value "The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.") the assets and liabilities recognized under paragraph [944-805-25-3](https://asc.understandingaccounting.org/asc/805/944/#805-944-25-3). However, the acquirer shall recognize that fair value in components as follows: 1. a Assets and liabilities measured in accordance with the acquirer's accounting policies for insurance and [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 that it issues or holds. For example, the contractual assets acquired could include a [reinsurance recoverable](https://asc.understandingaccounting.org/glossary/r/#reinsurance-recoverable "All amounts recoverable from reinsurers for paid and unpaid claims and claim settlement expenses, including estimated amounts receivable for unsettled claims, claims incurred but not reported, or policy benefits.") and the liabilities assumed could include a liability to pay future contract claims and claims expenses on the unexpired portion of the acquired contracts and a liability to pay incurred contract claims and claims expenses. However, those assets acquired and liabilities assumed would not include the acquiree's deferred [acquisition costs](https://asc.understandingaccounting.org/glossary/a/#acquisition-costs "Costs that are related directly to the successful acquisition of new or renewal insurance contracts.") and unearned premiums that do not represent future cash flows. 2. b An intangible asset (or occasionally another liability), representing the difference between the following: 1. 1 The fair value of the contractual insurance and reinsurance assets acquired and liabilities assumed 2. 2 The amount described in (a). ##### [805-944-30-2](https://asc.understandingaccounting.org/asc/805/944/#805-944-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:53.577Z to 2026-09-10T01:26:53.577Z Record version: sha256:3e83496a738e24fdce26896ca81529ab8c83f5a3f09b63fdeb4adaa8903910ef Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Other related contracts that are not insurance or reinsurance contracts shall be measured at the date of acquisition in accordance with Topic 805. ### Demutualizations #### Emergence of Earnings and Policyholder Dividend Obligation ##### [805-944-30-3](https://asc.understandingaccounting.org/asc/805/944/#805-944-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:53.577Z to 2026-09-10T01:26:53.577Z Record version: sha256:afc375f737db5096ac2f56aba952b9c6365088c4ed7a3b4dbfd93d2170bf8405 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. As of the [actuarial calculation date](https://asc.understandingaccounting.org/glossary/a/#actuarial-calculation-date "The date as of which the actuarial calculation is performed, which is as of the date of demutualization or formation of a mutual insurance holding entity."), a calculation shall be developed that represents the cash flows expected to be generated from the assets and liabilities included in the [closed block](https://asc.understandingaccounting.org/glossary/c/#closed-block "A mechanism to preserve, over time, the reasonable dividend expectations of individual policyholders with individual life, health, or annuity policies for which dividends are currently being paid or are expected to be paid under the current dividend scale. A closed block comprises a defined, limited group of policies and a defined set of assets, and is governed by a set of operating rules."). Based on that [actuarial calculation](https://asc.understandingaccounting.org/glossary/a/#actuarial-calculation "The periodic expected changes in the net closed block liability (on the basis of generally accepted accounting principles [GAAP]), which is after the elimination of the effect of applicable items of other comprehensive income. The amortization of deferred acquisition costs is not a component of the actuarial calculation because deferred acquisition costs are not a closed block asset."), the periodic expected changes in the [net closed block liability](https://asc.understandingaccounting.org/glossary/n/#net-closed-block-liability "The carrying amount of closed block liabilities in excess of the carrying amount of closed block assets each adjusted to eliminate the effect of related amounts in accumulated other comprehensive income at the actuarial calculation date. Deferred acquisition costs are not assets of the closed block.") (on the basis of generally accepted accounting principles \[GAAP\]), which is after the elimination of the effect of the applicable items of other comprehensive income shall be derived. The actuarial calculation shall be based on a best estimate (with no provision for adverse deviation) of the future performance of the closed block assets and liabilities as of the actuarial calculation date. ##### [805-944-30-4](https://asc.understandingaccounting.org/asc/805/944/#805-944-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T01:26:53.577Z to 2026-09-10T01:26:53.577Z Record version: sha256:b63f686299f3facfdcf764ce1f339a9fcf472b6cb257a5ac1bcbd6604e4bb06b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The actuarial calculation described in the preceding paragraph shall continue to be used in subsequent accounting periods to determine the change in the policyholder dividend obligation. The actuarial calculation shall not be revised in future accounting periods.