Mistake in Exhibit of Net Investment Income

Comments

• akivalevy01

  June 20

  And the Five Year Historical Data line 13 column 1 doesn't match with the Statement of Income line 8 column 1.
  If Ficticous Insurance Company keeps this up, it may get downgraded.
• graham

  June 21 edited June 21

  About your first question where you noted:

  • Exhibit of Net Investment Income, line 11 = 399,000
  • U&I Exhibit Part 3 line 25 column 3 = 393,000

  So there is a discrepancy of 6,000. You are doing what I did when I first learned this material. You're trying to understand and reconcile the flow of numbers across different exhibits. That's a very good thing to do to understand properly how these financial statements work. Unfortunately, there are no formulas in these PDF exhibits and no complete explanation for how these exhibits are created. So:

  • Most importantly: You shouldn't be tested on things like this since it isn't explained in the text. This is a detailed accounting issue and is likely far too detailed for the purposes of this exam. You aren't required to create these exhibits (except maybe for certain details of Schedule F and Schedule P.)
  • It could be an error.
  • Or it could be due to various other reasons such as: expense classification differences, timing differences, or possibly write-ins (additional write-ins or adjustments that are included in one exhibit but not the other.)

  Without having access to the underlying work papers, it is difficult to reconcile this difference.

  About your second question:

  • The same types of explanations may hold. Sometimes there's an explanation for these discrepancies in the notes to the financial statements but I did a quick scan and didn't seen anything.
• akivalevy01

  June 21

  Yep, thank you. When this stuff settles in, I won't go chasing down every number.

  I checked my company's 2023 Annual Statement, for reference. Those numbers did reconcile.