Part Total business - Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2011 - GRS 310.0_G (2011) - Income Statement (Level 2 Insurance Group) - Total business | Zoe
Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2011 - GRS 310.0_G (2011) - Income Statement (Level 2 Insurance Group)
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Turn the raw legal text into a practical explanation grounded in Financial Sector (Collection of Data) (reporting standard) determination No. 10 of 2011 - GRS 310.0_G (2011) - Income Statement (Level 2 Insurance Group).
For each line item where the data for individual regions is required to be manually entered, then the total business column must also be manually entered. For each line item, this will represent the sum of values reported under:
Australian business;
each region for international business; and
inter-region elimination.
1.0 Gross earned premium
Gross earned premium must be recognised in accordance with the requirements under AASB 1023.
Where there is reinsurance between regions, regions are to be reported on a separate basis. That is, the region directly assuming the risks must report as direct business. The reinsuring region should report this as direct business as well.
Where reinsurance occurs between entities in one region, the reinsurance transaction is eliminated on consolidation.
1.1 Gross earned premium on direct business
For each region, report the gross earned premium on direct business.
1.2 Gross earned premium on inwards reinsurance business
For each region, report the gross earned premium on inwards reinsurance business.
1.3 Total gross earned premium
This is automatically calculated by the form and represents the total of item 1.1 and item 1.2.
2.0 Reinsurance expense
Reinsurance expense must be recognised in accordance with the requirements under AASB 1023.
2.1 Reinsurance expense attributed to direct business
For each region, report the total outward reinsurance expense attributed to direct business.
2.2 Reinsurance expense attributed to inwards reinsurance business
For each region, report the total outward reinsurance expense attributed to inwards reinsurance business.
2.3 Total outward reinsurance expense
This is automatically calculated by the form and represents the total of item 2.1 and item 2.2.
3.0 Net Premium Revenue
This is automatically calculated by the form and represents the difference between item 1.3 and item 2.3.
4.0 Claims Expense
Report the claims expense for each region on:
4.1 direct business; and
4.2 inwards reinsurance business.
4.3 Gross Claims Expense
The Gross claims expense is automatically calculated by the form and represents the sum of item 4.1 and item 4.2
Report the reinsurance recoveries revenue for each region:
5.1 on direct business, and
5.2 on inwards reinsurance business.
5.3 Total Reinsurance Recoveries Revenue
This is automatically calculated by the form and represents the sum of item 5.1 and item 5.2.
6.0 Other Recoveries Revenue
This is the revenue from recoveries other than reinsurance recoveries, in respect of claims. Where appropriate it is to be reported after deducting the reinsurer’s share of the ‘other recoveries revenue’.
7.0 Total Recoveries
This is automatically calculated by the form and represents the sum of item 5.3 and item 6.0.
8.0 Net Incurred Claims
This is automatically calculated by the form and represents the difference between item 4.3 and item 7
8.1 Net incurred claims which is: current period net claims expense
Report the value of net insurance claims expense recognised during the reporting period, but only of which relate to the current period.
Current period net incurred claims expense represents:
current period claims payments;
current period reported outstanding case estimates (that is, case estimates created in the current period); and
current period incurred but not reported (and incurred but not enough reported) claims expenses.
Current period net incurred claims expense should be defined and reported according to the following:
the current period is defined as the current financial year to date;
net of all recoverables (including input tax credits reinsurance, salvage, subrogation and other recovery types);
inclusive of claims handling expense, assuming that industry generally includes claims handling costs with the claim paid component of the incurred claims expense;
the outstanding claims component be inflated only i.e. undiscounted; and
the outstanding claims component be on a central estimate basis i.e. without risk margins.
8.2 Net incurred claims which is: non-recurring items that are part of total net claims expense
Report the net incurred claims recognised during the reporting period which related to non-recurring items (ie those that are not classified as current period). This amount is the portion of item 8.0 that has not been reported at item 8.1.
Quarterly actuarial reviews are not required to be conducted specifically for the purposes of completing the above two items.
9.0 Underwriting expenses
9.1 Acquisition costs
Report the Acquisition Costs expensed for the period as recognised in accordance with Australian accounting standards. For the purposes of this item, exclude commission expenses which are to be included in item 9.5 below
9.2 Other underwriting expenses
This item will include all other underwriting expenses which are not included in item 9.1.
9.3 Liability adequacy test deficiency on unexpired risk
Report any adjustments from the liability adequacy test carried out in accordance with AASB 1023. This information is only to be supplied for geographical segments in cases where it is readily available. Where this information is not available the Level 2 insurance group must be able to provide APRA with details of how application of the liability adequacy test has impacted profitability of geographical segments.
9.4 Commission revenue
Report the value of commission revenue earned for the period. The measurement and recognition of commission revenue must be in accordance with the Australian accounting standards. Commission revenue is to be reported as a negative value.
9.5 Commission expense
Report the value, for the duration of the reporting period, of commission or brokerage paid for obtaining business for the Level 2 insurance group. This item is determined in accordance with Australian accounting standards.
9.6 Total underwriting expenses
This is automatically calculated by the form and represents the sum of the values reported for items 9.1 to 9.5.
10.0 Underwriting Result
The underwriting result is calculated automatically by the form and is derived from item 3.0 less item 8.0 less item 9.6.
11.0 Investment Income
11.1 Dividend revenue
Dividend revenue is to be recognised in accordance with Australian accounting standards.
Item 11.1 is automatically calculated by the form and represents the sum of item 11.1.1 and item 11.1.2.
For each region, report the value of dividend income received by the Level 2 insurance group for the period on:
11.1.1 listed equity; and
11.1.2 unlisted equity.
11.2 Interest revenue
Interest revenue is to be recognised in accordance with Australian accounting standards.
Report the value of interest revenue for each region during the period.
11.3 Trust revenue
Report the value of trust revenue for each region during the period.
Item 11.3 is automatically calculated by the form and represents the sum of item 11.3.1 and item 11.3.2.
Revenue should be reported separately for:
11.3.1 trusts on a 'look-through' basis; and
11.3.2 trusts without 'look-through'.
11.4 Rental income
Rental income represents the revenue arising from the Level 2 insurance group’s assets yielding rent, for example investment property rentals under Australian Accounting Standards AASB 140 ‘Investment Property’.
For each region, report the value of rental income earned during the period.
11.5 Other investment income
Report in this item all other investment income not reported above.
11.6 Net changes in fair value of investments
Changes in the fair value of investments are to be recognised in accordance with Australian accounting standards. For the measurement of assets follow AASB 1023 and other Australian accounting Standards. Unlike at Level 1, APRA will accept the notion of assets backing insurance liabilities for the Level 2 insurance group, provided these assets represent all assets controlled and managed by the group to support insurance liabilities. Investments backing general insurance liabilities must be measured at fair value.[7]
The form requires Level 2 insurance groups to report the net changes in the fair value of investments separately, based on whether they are:
realised gains and losses; or
unrealised gains and losses.
Record gains as positive amounts and losses as negative amounts.
Item 11.6 is automatically calculated by the form and represents the sum of item 11.6.1 and item11.6.2:’
11.6.1 Realised net gains and losses on:
Item 11.6.1 ‘Realised net gains and losses on:’ is automatically calculated by the form and represents the sum of items 11.6.1.1 to 11.6.1.5.
For each region, report the realised net gains or losses on:
11.6.1.1 interest bearing instruments;
11.6.1.2 listed equity;
11.6.1.3 unlisted equity;
11.6.1.4 investment property;
11.6.1.5 other investments.
11.6.2 Unrealised net gains and losses
Item 11.6.2 is automatically calculated by the form and represents the sum of items 11.6.2.1 to 11.6.2.5.
For each region, report the unrealised net gains or losses on:
11.6.2.1 interest bearing instruments;
11.6.2.2 listed equity;
11.6.2.3 unlisted equity;
11.6.2.4 investment property;
11.6.2.5 other investments.
11.7 Total investment Income
Total investment income is calculated automatically by the form and represents the sum of item 11.1, item 11.2, item 11.3, item 11.4, item 11.5 and item 11.6.
For each region, Level 2 insurance groups are to report the total investment income arising from:
11.7.1 assets backing insurance liabilities; and
11.7.2 shareholders’ funds.
Investment income is to be determined for these items in the same manner as is adopted by the Australian accounting standards.
12.0 Other income
12.1 Net foreign exchange gains
Report any gains on foreign exchange separately for each region. Foreign exchange gains should be reported in accordance with Australian accounting standards. The amount reported is on a net basis. If a value is reported for a region at this item, then no value can be reported for this region at item 13.3.
12.2 Bargain purchases immediately recognised in profit or loss
Report bargain purchases immediately recognised in profit and loss, recognised and measured in accordance with Australian accounting standards.
12.3 Defined benefit actuarial gains
Report the value of any defined benefit actuarial gains recognised and measured in accordance with Australian accounting standards.
12.4 Other income
Report all other income not reported above in this item. Include in this item any increment or decrement (write down) from the revaluation of other assets. Decrements are to be reported as a negative number.
12.5 Profit from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations
Report any gain on the measurement of a non-current asset (or disposal group) classified as held for sale that does not meet the definition of a discontinued operation.
This item must be completed in accordance with the requirements of Australian accounting standards.
12.6 Total other income
Total other income is calculated automatically by the form and represents the sum of items 12.1 through to 12.5.
13.0 Other expenses
13.1 Investment expenses on assets backing insurance liabilities
For each region, report the value of investment expenses incurred for the period by the Level 2 insurance group on assets backing insurance liabilities.
13.2 Investment expenses on shareholders' funds
For each region, report the value of investment expenses incurred for the period by the Level 2 insurance group on shareholders' funds.
13.3 Net foreign exchange losses
Report any losses on foreign exchange separately for each region. Foreign exchange losses should be reported in accordance with Australian accounting standards. The amount reported is on a net basis. If a value is reported for a region at this item, then no value can be reported for this region at item 12.1.
13.4 Finance costs
For each region, report the value of expenses incurred for the period in relation to financing.
13.5 Defined benefit actuarial losses
Report the value of any defined benefit actuarial losses recognised and measured in accordance with Australian accounting standards.
13.6 Other operating expenses
Report in this item other operating expenses not reported above.
13.7 Loss from non-current assets and disposal groups classified as held for sale not qualifying as discontinued operations
Report any loss on the measurement of a non-current asset (or disposal group) classified as held for sale that does not meet the definition of a discontinued operation.
This item must be completed in accordance with the requirements of Australian accounting standards.
13.8 Other
Report in this item expenses not reported above. This will include any:
impairment of goodwill recognised in the income statement in accordance with the requirements of Australian accounting standards; and
net asset revaluation adjustments (including non-consolidated subsidiaries) that is recognised in the income statement. These amounts may not equal the amounts reported in accordance with Australian accounting standards due to the prudential requirements relating to the valuation of non-consolidated subsidiaries and the mandatory revaluation of owner occupied property using the revaluation model under Australian Accounting Standard AASB 116 ‘Property Plant and Equipment’
13.9 Total other expenses
This is automatically calculated by the form and represents the sum of items 13.1 through to 13.8.
14.0 Profit (loss) before income tax expense (benefit) from continuing operations
The profit (loss) from continuing operations is calculated automatically by the form and is derived from item 10.0 plus item 11.7 plus item 12.6 less item 13.9.
15.0 Income tax expense (benefit) from continuing operations
This represents the income tax expense or benefit attributable to the profit or loss from continuing operations.
This item must be completed in accordance with the requirements of Australian accounting standards.
16.0 Profit (loss) after income tax and before minority interests from continuing operations
This item is calculated automatically by the form and is derived from item 14.0 less item 15.0.
17.0 Profit (loss) after income tax from discontinued operations
Profit (loss) after income tax from discontinued operations is to be classified and reported in accordance with the Australian accounting standards.
18.0 Total profit (loss) after income tax and discontinued operations and before minority interests
This is calculated automatically by the form and is derived from item 16.0 plus item 17.0.
19.0 Net profit (loss) after income tax attributable to minority interests
This item is to be reported in accordance with the requirements of the Australian accounting standards.
20.0 Net profit (loss) after income tax attributable to members of the company
This is calculated automatically by the form and is derived from item 18.0 less item 19.0.
21.0 Retained earnings at beginning of the financial year
Report here the relevant retained earnings amount at the beginning of the current financial year. For the first year of reporting the APRA forms, use the retained earnings figure as per the Level 2 insurance group’s financial statements prepared in accordance with Australian accounting standards.
22.0 Adjustments to retained earnings due to changes in accounting policies
Include the value of aggregate adjustments to retained earnings due to changes in accounting policies in accordance with Australian accounting standards.
23.0 Reduction in retained earnings on share buy back
Disclose that portion of the consideration used for share buy backs during the reporting period that is allocated to retained earnings. This should be entered as a positive value.
24.0 Amounts transferred to / from reserves
Disclose the net amount of funds transferred during the reporting period between reserves and retained earnings. A net transfer from reserves will be a positive value and a net transfer to reserves will be a negative value.
25.0 Total available for appropriation
This amount is calculated automatically by the form and is derived from item 20.0 plus item 21.0 plus item 22.0 less item 23.0 plus item 24.0.
26.0 Dividends declared or paid
Report dividends that have been declared or paid by the Level 2 insurance group during the reporting period. Dividends are to be recognised in accordance with the Australian accounting standards.
27.0 Retained earnings at the end of the reporting period
This is calculated automatically by the form and is derived from item 25.0 less item 26.0.