reinsurance contracts

This subtopic applies the financial instruments guidance to insurance entities, covering investment contracts and disclosures about concentrations of credit risk arising from reinsurance contracts. Amounts received under investment contracts are not revenue; they are recorded as liabilities and accounted for like interest-bearing or other financial instruments, with related deferred acquisition costs reported as an asset. Ceding entities must disclose credit risk concentrations for reinsurance recoverables and prepaid reinsurance premiums, and must disclose the carrying amount of securities deposited with state regulatory authorities.

ASC 944-10 is the Overall subtopic of the Financial Services—Insurance Topic; it serves as the roadmap and scope gate for all insurance-specific accounting guidance. It lists the Topic's Subtopics (acquisition costs, claim costs and liabilities for future policy benefits, policyholder dividends, premium deficiency, separate accounts, and the statement/disclosure subtopics) and identifies the four contract-type Subsections used throughout: short-duration, long-duration, reinsurance, and financial guarantee insurance contracts. The guidance is incremental industry-specific guidance—entities in scope must still apply all other applicable GAAP.