Income Tax Assessment Act 1997
Work out the value, at the end of an income year, of a *general insurance company ' s adjusted *liability for remaining coverage under *general insurance policies in this way: Method statement
Step 1.
Use the *applicable insurance contracts accounting standard to measure, at the end of the income year, the company ' s *liability for remaining coverage under *general insurance policies, but when doing so disregard that standard ' s treatment of loss components and loss-recovery components of onerous contracts (within the meaning of that standard).
Step 2.
Using that standard, reduce the result from step 1 by any *asset for insurance acquisition cash flows.
Step 3.
Using that standard, reduce the result from step 2 by any premiums paid or payable by the company, in that or an earlier income year, for the reinsurance of risks covered by those *general insurance policies in respect of later income years, except:
Step 4.
Using that standard, add to the result from step 3 any reinsurance commissions received or receivable by the company that relate to reinsurance premiums counted under step 3.
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