# ASC 944-50: Financial Services—Insurance — Policyholder Dividends Source: FASB Accounting Standards Codification, Basic View [Read online](https://asc.understandingaccounting.org/asc/944/50/) 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): 2026-09-10T02:17:16.793Z to 2026-09-10T02:17:40.431Z Record version: sha256:7c4f8f1233a83d118f201fd5cd2b87293b0dd0d90204a1208e959411a3b0f282 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50: Financial Services—Insurance — Policyholder Dividends ### Machine-generated study aids ```json { "summary": "ASC 944-50 governs how insurance entities account for and report policyholder dividends on participating insurance contracts. For participating contracts other than the long-duration participating life contracts described in 944-20-15-3, dividends are accrued (measured at an estimate of the amount to be paid, or recognized over the premium-paying period using anticipated/illustrated dividend scales), and any policyholders' share of net income that cannot be distributed to stockholders is charged to operations and credited to a participating policyholders' funds liability. For long-duration participating life contracts meeting 944-20-15-3, annual policyholder dividends are expensed based on amounts incurred for policies in force and reported separately in the statement of earnings.", "key_points": [ "Policyholder dividends on participating contracts other than the long-duration participating life contracts identified in 944-20-15-3 shall be accrued (944-50-25-1), measured using an estimate of the amount to be paid (944-50-30-1).", "When limitations exist on the net income from participating contracts distributable to stockholders, the nondistributable policyholders' share is excluded from stockholders' equity by a charge to operations and credited to a liability for participating policyholders' funds; dividends declared or paid reduce that liability, and any excess is charged to operations (944-50-25-2).", "For life insurance entities with no net income restrictions that use dividend scales unrelated to actual net income, dividends are accrued over the premium-paying periods (944-50-25-3), based on dividends anticipated or intended in setting gross premiums or shown in published dividend illustrations at contract inception (944-50-30-3).", "Income-based dividend provisions must be based on net income that includes GAAP-to-statutory adjustments that will reverse and enter into future dividend calculations (944-50-30-2).", "For long-duration participating life insurance contracts meeting the criteria in 944-20-15-3, annual policyholder dividends are expensed based on estimates of amounts incurred for policies in effect during the period (944-50-25-4; 944-50-30-4), with pro rata accrual between anniversary dates (944-50-30-5).", "That annual policyholder dividend expense must be reported separately in the statement of earnings (944-50-45-1).", "Required disclosures are the relative percentage of participating insurance, the method of accounting for policyholder dividends, the amount of dividends, and the amount of any additional income allocated to participating policyholders (944-50-50-1)." ], "categories": [ "Industry-specific", "Recognition", "Presentation", "Disclosure" ], "audience_level": "intermediate", "student_note": "The whole subtopic turns on one fork: whether the contract is a long-duration participating life contract meeting 944-20-15-3 (dividends expensed as incurred and shown separately) or any other participating contract (dividends accrued, sometimes over the premium-paying period, with a policyholders' funds liability when distributions to stockholders are restricted). Students commonly forget that terminal dividends are not covered here — they are handled in the liability for future policyholder benefits under 944-40-25-30 and 944-40-35-22 through 35-23.", "related_topics": [ "944-20", "944-40", "944-10", "944-740", "944-30" ], "key_concepts": [ "policyholder dividends", "participating insurance contracts", "long-duration contracts", "participating policyholders' funds liability", "dividend scales", "terminal dividends", "premium-paying period accrual" ] } ``` Source downloaded (UTC): 2026-09-10T02:17:16.793Z to 2026-09-10T02:17:16.793Z Record version: sha256:075988fcff3f14d04d4d36d212343c3a327a9e42340e94fb1d8f791fee4380bd Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-00: 00 Status [Read section](https://asc.understandingaccounting.org/asc/944/50/#00-status) SEC content: no ##### [944-50-00-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-00-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:16.793Z to 2026-09-10T02:17:16.793Z Record version: sha256:943a95d5e94c8621ba3b341189b63164cd772ea297b1c25caaa1bf9c787cc8ae Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The following table identifies the changes made to this Subtopic.
ParagraphActionAccounting Standards UpdateDate
Participating Insurance ContractsSupersededAccounting Standards Update No. 2016-1912/14/2016
944-50-25-2AmendedAccounting Standards Update No. 2016-1912/14/2016
944-50-25-5AmendedAccounting Standards Update No. 2018-1208/15/2018
Source downloaded (UTC): 2026-09-10T02:17:20.214Z to 2026-09-10T02:17:20.214Z Record version: sha256:d24d1ce5d6ec9a5085c368a2e3c5d10fd2c377600516bb14a88191a6a62100ac Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-05: 05 Overview and Background [Read section](https://asc.understandingaccounting.org/asc/944/50/#05-overview-and-background) SEC content: no ##### [944-50-05-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-05-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:20.214Z to 2026-09-10T02:17:20.214Z Record version: sha256:e7270a4aea85b31396d7c221533d4cce2d0b3b808005957d0c26d8575c8453ff Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic provides insurance entities guidance on the accounting for and financial reporting of policyholder dividends. The guidance in this Subtopic is presented in the following two Subsections: 1. a General 2. b Long-Duration Contracts. ### Long-Duration Contracts ##### [944-50-05-2](https://asc.understandingaccounting.org/asc/944/50/#944-50-05-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:20.214Z to 2026-09-10T02:17:20.214Z Record version: sha256:f976b63e693fbf2baf72539264d8ae79be8cfc6b7ef025bc151af1160ded78d1 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Long-Duration Contracts Subsections of this Subtopic provide insurance entities guidance on the accounting for and financial reporting of policyholder dividends on long-duration contracts. Source downloaded (UTC): 2026-09-10T02:17:24.083Z to 2026-09-10T02:17:24.083Z Record version: sha256:20b45fe7ee9e6dace3e1e6ea25726006c4850811ce08982ed91339c5fbe83a7b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-15: 15 Scope and Scope Exceptions [Read section](https://asc.understandingaccounting.org/asc/944/50/#15-scope-and-scope-exceptions) SEC content: no #### Overall Guidance ##### [944-50-15-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-15-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:24.083Z to 2026-09-10T02:17:24.083Z Record version: sha256:5c1e710e6588252d9e8c66c9174141ea3034697c34aaa9b57889a72142a548e7 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This Subtopic follows the same Scope and Scope Exceptions as outlined in the Overall Subtopic, see Section 944-10-15. The guidance in this Subtopic distinguishes between participating contracts that meet the criteria in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3) and those that do not. ### Long-Duration Contracts ##### [944-50-15-2](https://asc.understandingaccounting.org/asc/944/50/#944-50-15-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:24.083Z to 2026-09-10T02:17:24.083Z Record version: sha256:c499540dc35b7a46363c66ae665872c3dca544653a1ff2ebb3e07cb46819206d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The Long-Duration Contracts Subsections of this Subtopic follow the same Scope and Scope Exceptions as outlined in the [General Subsection](https://asc.understandingaccounting.org/asc/944/50/#15-scope-and-scope-exceptions) of this Section, with specific instrument qualifications noted below. #### Instruments ##### [944-50-15-3](https://asc.understandingaccounting.org/asc/944/50/#944-50-15-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:24.083Z to 2026-09-10T02:17:24.083Z Record version: sha256:2c88b3a132ea8d2b1c8237909ea28eb25154551a440080589924706aca02808a Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The guidance in the Long-Duration Contracts Subsections of this Subtopic applies only to long-duration insurance contracts. For guidance on identifying a long-duration insurance contract, see the [Long-Duration Contracts Subsection](https://asc.understandingaccounting.org/asc/944/20/#15-scope-and-scope-exceptions) of Section 944-20-15. Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:d7960f30980e611c8db457e0d8cb09b24d6c40efdd9e02ab8045e59ae2d0deb6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-25: 25 Recognition [Read section](https://asc.understandingaccounting.org/asc/944/50/#25-recognition) SEC content: no #### Participating Contracts ##### [944-50-25-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:2e37d5b087bdb5c172cc94ac9982d76e0f250ca1bdbd9713bd88605a99aa98d6 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For participating contracts other than those long-duration participating life insurance contracts identified in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3), policyholder dividends shall be accrued. ##### [944-50-25-2](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:836aa8378e30bc317a792474468fe25848acf4217f28d4ea9105bb55f0d5d154 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance applies to participating contracts other than those long-duration participating life insurance contracts identified in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3). Limitations may exist on the amount of net income from [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") contracts of a [life insurance entity](https://asc.understandingaccounting.org/glossary/l/#life-insurance-entity "An entity that can issue annuity, endowment, and accident and health insurance contracts as well as life insurance contracts. Life insurance entities may be either stock or mutual entities.") that may be distributed to stockholders. In that circumstance, the policyholders' share of net income on those contracts that cannot be distributed to stockholders shall be recognized by both: 1. a Excluding that share from stockholders' equity by a charge to operations 2. b Recognizing that share as a credit to a liability relating to participating policyholders' funds. Dividends declared or paid to participating policyholders shall reduce the liability recognized in (b); dividends declared or paid in excess of the liability shall be charged to operations. ##### [944-50-25-3](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:ff8857a26f620721370bbeb4cc422fcc5ed43dc8221ad50eb3a8b1aa160f9362 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. This guidance applies to participating contracts other than those long-duration participating life insurance contracts identified in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3). For life insurance entities for which there are no net income restrictions and that use life insurance [dividend scales](https://asc.understandingaccounting.org/glossary/d/#dividend-scales "The actuarial formulas used by life insurance entities to determine amounts payable as dividends on participating policies based on experience factors relating, among other things, to investment results, mortality, lapse rates, expenses, premium taxes, and policy loan interest.") unrelated to actual net income, policyholder dividends shall be accrued over the premium-paying periods of the contracts. Paragraph [944-740-25-1](https://asc.understandingaccounting.org/asc/740/944/#740-944-25-1) states that, although payment is not required, a dividend recognized under this paragraph is considered a planned contractual benefit in computing generally accepted accounting principle (GAAP) liabilities, it may be necessary to identify the amount of this dividend to calculate deferred income taxes in those cases in which there is a question as to whether the dividend provision in the liabilities, together with the dividends paid or declared, may exceed the amount of dividends otherwise deductible for federal income tax purposes. ### Long-Duration Contracts #### Certain Long-Duration Participating Life Insurance Contracts ##### [944-50-25-4](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:247d4c451b6b1edd7dc7272797c7dc0d15079ad9ec2a86d9cba30a56067aad2f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For long-duration participating life insurance contracts that meet the criteria in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3), [annual policyholder dividends](https://asc.understandingaccounting.org/glossary/a/#annual-policyholder-dividends "Amount of dividends to policyholders calculated and paid each year, representing the policyholders' share of divisible surplus.") shall be expensed. ##### [944-50-25-5](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:29.887Z to 2026-09-10T02:17:29.887Z Record version: sha256:3c1c09e3f05661f1c857d0adf100b9ea1aac7a0dd07041832d7fd9c6d8c54dc2 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. See paragraphs [944-40-25-30](https://asc.understandingaccounting.org/asc/944/40/#944-40-25-30) and [944-40-35-22 through 35-23](https://asc.understandingaccounting.org/asc/944/40/#944-40-35-22) for guidance on accounting for [terminal dividends](https://asc.understandingaccounting.org/glossary/t/#terminal-dividends "Dividends to policyholders calculated and paid upon termination of a contract, such as on death, surrender, or maturity.") as part of the liability for future policyholder benefits. Source downloaded (UTC): 2026-09-10T02:17:31.739Z to 2026-09-10T02:17:31.739Z Record version: sha256:3c4926d41d74023b5b08a43cb3470ec1d0aabd66942ee8819b8847382143404f Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-30: 30 Initial Measurement [Read section](https://asc.understandingaccounting.org/asc/944/50/#30-initial-measurement) SEC content: no #### Participating Contracts ##### [944-50-30-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-30-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:31.739Z to 2026-09-10T02:17:31.739Z Record version: sha256:be392af8a811b04f19b9da6ff9124cfb85e2d8d44e328fa0acf200730cb66a3b Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Policyholder dividends accrued under paragraph [944-50-25-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-1) shall be measured using an estimate of the amount to be paid. ##### [944-50-30-2](https://asc.understandingaccounting.org/asc/944/50/#944-50-30-2) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:31.739Z to 2026-09-10T02:17:31.739Z Record version: sha256:e06d476c128439a457b86cc128025f0f19cb031a9f7f639e548d2733be250f06 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Income-based dividend provisions for participating contracts other than those long-duration participating life insurance contracts that meet the criteria in paragraph [944-20-15-3](https://asc.understandingaccounting.org/asc/944/20/#944-20-15-3), shall be based on net income that includes adjustments between general-purpose and statutory financial statements that will reverse and enter into future calculations of the dividend provision. ##### [944-50-30-3](https://asc.understandingaccounting.org/asc/944/50/#944-50-30-3) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:31.739Z to 2026-09-10T02:17:31.739Z Record version: sha256:604b8d730026ccfc1e6f7a0d9b0942bce88b3c026f9695211c4f446c24d59e88 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Policyholder dividends shall be recognized over the premium-paying periods under paragraph [944-50-25-3](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-3) based on dividends anticipated or intended in determining gross premiums or as shown in published dividend illustrations at the date insurance contracts are made. ### Long-Duration Contracts #### Certain Long-Duration Participating Life Insurance Contracts ##### [944-50-30-4](https://asc.understandingaccounting.org/asc/944/50/#944-50-30-4) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:31.739Z to 2026-09-10T02:17:31.739Z Record version: sha256:e3bfc152d0533337177ecea1d542e7d248c5d7d396439731d9f6884d53b21767 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expense recognized under paragraph [944-50-25-4](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-4) for [annual policyholder dividends](https://asc.understandingaccounting.org/glossary/a/#annual-policyholder-dividends "Amount of dividends to policyholders calculated and paid each year, representing the policyholders' share of divisible surplus.") shall be based on estimates of amounts incurred for the policies in effect during the period. ##### [944-50-30-5](https://asc.understandingaccounting.org/asc/944/50/#944-50-30-5) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:31.739Z to 2026-09-10T02:17:31.739Z Record version: sha256:ac6825dcb84bf46cb8ca5d6b82da07dd4ee52a3272a84fd2615477f353adafe3 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. For example, if a policy has an anniversary date of June 30, at which time annual dividends are paid, at December 31, 19X1, dividends should be accrued for the period July 1, 19X1, through December 31, 19X1. Source downloaded (UTC): 2026-09-10T02:17:34.746Z to 2026-09-10T02:17:34.746Z Record version: sha256:81af3b079d8e174754c050367af9a1dc8a149fbdfdc9c6d5a3c023eca507d792 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-45: 45 Other Presentation Matters [Read section](https://asc.understandingaccounting.org/asc/944/50/#45-other-presentation-matters) SEC content: no ### Long-Duration Contracts #### Certain Long-Duration Participating Life Insurance Contracts ##### [944-50-45-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-45-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:34.746Z to 2026-09-10T02:17:34.746Z Record version: sha256:ca45ab999a049241ae8ba08140a384e583b100f9eeeef42ce9fb140c97b4c060 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. The expense recognized under paragraph [944-50-25-4](https://asc.understandingaccounting.org/asc/944/50/#944-50-25-4) for [annual policyholder dividends](https://asc.understandingaccounting.org/glossary/a/#annual-policyholder-dividends "Amount of dividends to policyholders calculated and paid each year, representing the policyholders' share of divisible surplus.") shall be reported separately in the statement of earnings. Source downloaded (UTC): 2026-09-10T02:17:37.723Z to 2026-09-10T02:17:37.723Z Record version: sha256:edd62cbd7ecf05d0928bb6e9035547b3e7e64f89fc92be6db16ba8071a445200 Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. ## ASC 944-50-50: 50 Disclosure [Read section](https://asc.understandingaccounting.org/asc/944/50/#50-disclosure) SEC content: no #### Participating Contracts ##### [944-50-50-1](https://asc.understandingaccounting.org/asc/944/50/#944-50-50-1) Pending content: no Source downloaded (UTC): 2026-09-10T02:17:37.723Z to 2026-09-10T02:17:37.723Z Record version: sha256:34b013d3a46ed92dd91097b238a5f474e4d52fd2569f7d9ae75fa2865af2ab3d Snapshot version: sha256:15aea8165dff9f5ae47d9484f8470588b13b307f56e1d50801bf4d85ec190e3f Effective as of: not established by retrieval timestamps. Insurance entities shall disclose all of the following in their financial statements: 1. a The relative percentage of [participating insurance](https://asc.understandingaccounting.org/glossary/p/#participating-insurance "Insurance in which the policyholder is entitled to participate in the earnings or surplus of the insurance entity. The participation occurs through the distribution of dividends to policyholders.") 2. b The method of accounting for policyholder dividends 3. c The amount of dividends 4. d The amount of any additional income allocated to participating policyholders.