NAIC.SSAP-5R
Reading: Statement of Statutory Accounting Principles 5R, “Liabilities, Contingencies and Impairment of Assets,” paragraphs 1-12, 30-33, and 37-38
Author: National Association of Insurance Commissioners, Accounting Practices and Procedures Manual, 2022
| BA Quick-Summary: Accounting Principles
SSAP-5R defines and establishes statutory accounting principles for liabilities, contingencies and impairments of assets. |
Study Tips
The CAS syllabus citation for this article is confusing. The syllabus says this is a new reading, however, it actually isn't. The year of publication for the manual changes each year but the content generally does not. We will let you know if there is a major change.
- 2022-Fall: There was 1 very minor update that is noted further down.
This is a reading where your best strategy is to play the odds. In other words, skip it unless you've already learned the top 24 readings very, very well. It contains definitions for several terms that seem important, but none has ever been asked. If I were studying for this exam, I would blow it off. Worst case scenario: there's a 1.0-point question and you take an educated guess.
BattleTable
- this reading has not been tested on any exam from the year 2012 to Fall 2019 when the exams stopped being published.
reference part (a) part (b) part (c) part (d) no prior questions
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In Plain English!
| Question: identify the components of a liability |
- responsibility to transfer assets upon occurrence of a specified event
- responsibility cannot be avoided
- event has occurred
| Question: define loss contingency or asset impairment and identify the 3 levels |
- a condition involving uncertainty regarding amount of loss
- resolved when future event occurs or fails to occur
- levels:
- - probable (likely to occur)
- - reasonably possible (between probably and remote)
- - remote (slight chance of occurring)
| Question (new for 2022-Fall): if a financial instrument has characteristics of both liabilities and equity then how should it be reported in financial statements |
- as a liability, to the extent the instrument embodies an unconditional obligation of the issuer
That's about it. Here's the quiz...
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