top of page
Search

Key man insurance accounting

key man insurance is a type of financial assets. If it has to pay a lump sum, with bonus return over the life of the insurance. The insurance is exposes to equity for the bonus return. It should be accounted for as fair value through profit and loss.


The fair value should consider the fair value of the underlying fund invested.


The cash surrender value is not appropriate as it is not for cancellation. The discounted benefit insured is also not appropriate as it is hard to estimate when the key man died. However, morality rate could one of factor to consider when measure the fair value of the benefit.

 
 
 

Recent Posts

See All
Revenue completeness

The golden rule - revenue completeness can never ever be ascertained from issued sales invoice. Revenue completeness should be ascertained from fulfilled order, contract or delivery note. It should

 
 
 
Audit thinking logic

What are we going to audit - revenue, trade receivables, unquoted equity investments, trade payables, etc What audit procedures (nature, timing) to be performed to ascertain each of the assertions Wha

 
 
 
Audit schedule provided by client in audit

Before we place reliance on audit schedule provided by client in an audit engagement, we are required to ensure the completeness and accuracy of the audit schedule. In order to address the issue, we n

 
 
 

Comments

bottom of page