Term
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Definition
For bond interest, the amount of interest that has been earned
on a bond, but is not yet payable to the bondholder as of the financial reporting date. |
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Term
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Definition
Assets for which the full value may be reported on the Assets
page of a life insurance company’s U.S. Annual Statement. |
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Term
| American Institute of Certified Public Accountants (AICPA). |
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Definition
A professional
association of U.S. Certified Public Accountants (CPAs) that directly influences
accounting practices in the United States. |
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Term
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Definition
An asset’s original cost, adjusted for transaction costs, depreciation,
and other amounts. |
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Term
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Definition
The amount by which the selling price of an asset exceeds its
purchase price. |
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Term
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Definition
The amount by which the purchase price of an asset exceeds
the asset’s selling price. |
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Term
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Definition
| A bond’s stated interest rate. |
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Term
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Definition
An asset’s selling price under current economic conditions.
Also known as fair market value. |
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Term
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Definition
Financial assets representing a claim to collect a loan from a
borrower. |
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Term
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Definition
When a bond’s current market value is less than the bond’s principal,
the difference between the bond’s current market value and the bond’s par. |
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Term
| effective rate of return. |
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Definition
| The actual rate of return. Also known as effective yield. |
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Term
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Definition
| Ownership of an asset or assets or of shares in a corporation. |
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Term
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Definition
A trust account used to pay property maintenance expenses,
property taxes, insurance, and other expenses related to a mortgaged property. |
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Term
| Financial Accounting Standards Board (FASB). |
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Definition
A private organization that
represents the accounting profession and to which the SEC has delegated
responsibility for establishing U.S. GAAP. |
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Term
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Definition
Accounting records that are designed to support
financial reporting to investors and the public and that focus on showing the
company’s financial stability along with its profitability. |
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Term
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Definition
The amount of income that represents the total amount
of income an insurer actually earned during the reporting year, before deducting
investment expenses. |
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Term
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Definition
| The purchase price originally paid for an asset. |
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Term
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Definition
Securities that are in default. Generally, a security is in
default or impaired if the security’s issuer is not current on payments of principal
or interest or if the security’s issuer is in receivership or bankruptcy. |
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Term
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Definition
Assets that represent ownership of a legal right or another
nonphysical resource. |
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Term
| internal accounting records. |
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Definition
Accounting records designed to support financial
reporting to company management, whose main interest is in having appropriate
data for making decisions. Also known as modified GAAP accounting records or
management accounting records. |
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Term
| Internal Revenue Service (IRS). |
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Definition
A part of the U.S. Department of the Treasury
that enforces laws and regulations concerning federal income taxes. |
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Term
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Definition
| The costs associated with managing invested assets. |
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Term
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Definition
Income consisting of the earnings a company receives
on its invested assets. |
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Term
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Definition
Assets that a company expects to hold for more than one year.
Also known as noncurrent assets. |
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Term
| lower of cost or market (LCM) rule. |
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Definition
A statutory accounting rule that defines
a bond’s monetary value as either its amortized cost or its current market value,
whichever is lower. |
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Term
| National Association of Insurance Commissioners (NAIC). |
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Definition
An association of
state insurance commissioners designed to promote consistent insurance regulation. |
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Term
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Definition
The amount of investment income that remains after
deducting expenses and amortization from an insurer’s gross investment income. |
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Term
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Definition
Assets for which no value may be reported on the
Assets page of a life insurance company’s U.S. Annual Statement. |
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Term
| other than temporary impairment (OTTI) standards. |
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Definition
SEC reporting standards
that require bonds to be reported at a reduced value if their price remains below a
specified threshold for longer than three months. |
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Term
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Definition
| The amount of money—usually $1,000—that must be repaid at a bond’s maturity. |
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Term
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Definition
When a bond’s current market value is greater than the bond’s par,
the difference between the bond’s current market value and its par. |
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Term
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Definition
| Land or anything attached to the land. |
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Term
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Definition
The difference between an asset’s net sales proceeds
and its book value. |
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Term
| Securities and Exchange Commission (SEC). |
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Definition
A federal government agency
that regulates the investment industry. |
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Term
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Definition
Cash and assets that a company expects to convert
to cash within one year. Also known as current assets or liquid assets. |
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Term
| statutory accounting records. |
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Definition
Accounting records designed to support financial
reporting to state insurance regulators, whose primary interest is in evaluating
insurers’ solvency and long-term financial stability. |
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Term
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Definition
| Assets that have physical form. |
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Term
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Definition
Accounting records designed to support financial
reporting to taxing authorities. |
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Term
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Definition
The process of calculating the monetary value of assets, liabilities,
and owners’ equity. |
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Term
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Definition
| A permanent reduction in the book value of an asset. |
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