FRS 27 has been superseded by FRS 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland for accounting periods beginning on or after 1 January 2015. For more information visit:

• icaew.com/newukgaap

Synopsis

FRS 27 requires:

• For a company within the scope of the FSA's realistic capital regime, liabilities to policyholders are required to be measured on the basis determined in accordance with that regime, subject to adjustments specified in the FRS.
• The fund for future appropriations (FFA) must be separately presented on the balance sheet and an explanation given of a negative FFA balance.
• Restrictions on the recognition of the value of in-force business.
• Capital statement is required setting out the total available capital for sections of the life assurance business of the entity - supported by information on regulatory capital requirements or management’s capital targets, the basis of determining regulatory capital, the sensitivity of liabilities and capital to changes in market variables and key assumptions, and the entity's capital management policies.
• Disclosure of the assumptions used in the measurement of liabilities, and the terms and conditions of options and guarantees relating to life assurance contracts.
• A movements table is also required to show the changes in capital from one reporting date to the next.

• Read FRC Summary on FRS 27