Components of Net AssetsComponents of Net Assets

Components of Net Assets

24. Foreign currency translations

The treatment of foreign currency translation is set out in the relevant accounting standards. Entities must determine whether (some or all of) the resulting amounts represent a component of operating profit (loss) for the purposes of the Life Insurance Act 1995. This item would generally only be expected to apply at the shareholders fund level as all operating profit (loss) of a statutory fund must be allocated to retained profits in accordance with sections 59 and 60 of the Life Insurance Act 1995. A life insurer reporting a balance at the statutory fund level should be able to identify how its creation is consistent with the requirements of the Act.

25. Reserves:

25.1 Unallocated Benefit Fund reserves

Value of benefit funds which has not been allocated to either the benefit fund members or to the management fund. This item is only expected to be applicable to friendly societies.

25.2 Other reserves

Include all other reserves not specifically categorised above.

26 Share Capital

Includes all share capital, e.g. ordinary shares, preference shares etc recognised as capital for the purposes of Prudential Standards No 3 (PS 3).

27 Shareholders’ Retained Profits

This represents the sum of Shareholders’ Retained Profits (or accumulated losses) at beginning of the period and the Profit (or Loss) after Income Tax attributable to Shareholders for the reporting period, after any transfers to or from reserves.

28 Total Components = Life Insurance Act Net Assets [derived item]

This represents the sum of component items making up Net Assets, and must equal the derived item for Net Assets shown at Item 23.