excess future servicing costs

Liabilities1

1. 405-944Financial Services—Insurance405 Liabilities

   ASC 405-944 tells insurance entities where liability accounting guidance lives and adds one specific rule for reinsurance contracts. Liabilities for claims costs and future policyholder benefits are in Subtopic 944-40, premium deficiencies in 944-60, and policyholder dividends in 944-50. The substantive rule here: a ceding entity that agrees to service the reinsured contracts without reasonable compensation must accrue a liability for estimated excess future servicing costs (405-944-25-1).