Which of the Following Is Not a Part of Justice

question 41

Multiple Choice

Which of the following is not a part of Justice Owen's recommendations to the Australian Accounting Standards Board with respect to AASB 1023 "General Insurance Contracts"?

• A) Requirement that premium revenue and insurance liabilities be recognised on the commencement of a contract of insurance.
• B) Requirement that, in estimating the present value of liabilities, future cash flows be discounted using high quality corporate bond rate;
• C) Requirement that companies subject to the standard disclose a 10-year claims-development table that includes past estimates of claims on an undiscounted basis as well as the actual costs of settling claims.
• D) Requirement that insurance liabilities be valued at a level of sufficiency of at least 75 per cent, as required by APRA's prudential standards.
• E) None of the given answers

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Definitions:

Selling Price

The price at which a product or service is offered for sale to customers.

Sales Volume

The quantity of products or services sold by a company in a specific period.

Net Operating Income

A financial metric that calculates a company's profit after subtracting operating expenses, excluding taxes and interest.

Degree Of Operating Leverage

A measure, at a given level of sales, of how a percentage change in sales volume will affect profits. The degree of operating leverage is computed by dividing contribution margin by net operating income.