Handbook: Long-duration contracts
Handbooks | October 2025
Latest edition: Our updated guide for long-duration contracts, with Q&As, interpretive guidance and examples.
Our in-depth guide on ASU 2018-12, with new and updated interpretations and examples based on our experience with companies implementing ASU 2018-12.
Applicability
- Insurance entities that issue long-duration contracts
- Not applicable to policyholders of long-duration contracts or non-insurance entities
Relevant dates
| Effective date | SEC filers, except smaller reporting companies | All other entities |
|---|---|---|
Annual periods – Fiscal years beginning after | Dec 15, 2022 | Dec 15, 2024 |
Interim periods – In fiscal years beginning after | Dec 15, 2022 | Dec 15, 2025 |
Early adoption allowed? | Yes. If early adoption is elected, the transition date is either the beginning of the prior period presented or the beginning of the earliest period presented. | |
Targeted – but not simple – improvements
In August 2018, the FASB issued ASU 2018-12, Targeted Improvements to the Accounting for Long-Duration Contracts, the culmination of a decade-long insurance accounting project. This standard changes how entities recognize, measure, present and disclose long-duration contracts. It is intended to improve, simplify and enhance the financial reporting of long-duration contracts – including providing users with more relevant information and a more current view of expected future cash flows.
The significance of the effort to implement this standard cannot be overstated, including changes to an entity’s systems, processes and internal controls. And, data is collected and organized differently.
Our objective is to help you achieve a thorough understanding of this standard. Although some companies have implemented this standard, accounting and reporting issues and positions continue to evolve. We hope to help those companies tackle post-implementation challenges.
Report contents
- Liability for future policy benefits
- Market risk benefits
- Deferred acquisition costs
- Other accounting items
- Enhanced disclosure requirements
- Effective dates and transition
Download the document:
Long-duration contracts
Download PDFExecutive summary
Download PDFExplore more
Resource
Handbook: Derivatives and hedging
Latest edition: Our in-depth guide on derivatives and hedge accounting, with our latest interpretations.
Handbooks
KPMG handbooks that include discussion and analysis of significant issues for professionals in financial reporting.
Reference Library
In-depth analysis, examples and insights to give you an advantage in understanding the requirements and implications of financial reporting issues.
Meet our team
