During May 2016, the FASB issued Accounting Standards Update (ASU) 2015-09, Disclosures about Short-Duration Contracts. This standard updates ASC 944, Financial Services, and will require expanded disclosures, including the following:

  • Incurred claims triangle(s) for up to 10 years:
    • Incurred claims & allocated claims adjustment expenses (CAE)
    • IBNR at end of period – broken out by year
    • Cumulative claim counts – broken out by year
  • Cumulative paid claims triangle(s) for up to 10 years
  • Reconciliation of incurred and paid claims triangles to balance sheet reserve liability
  • Claims duration (average payout by year)
  • Balance sheet roll forward for interim periods
  • Discussion of reserves including:
    • Methodologies for determining the presented amounts of both IBNR liabilities and the expected development on reported claims
    • Calculating cumulative claim frequency information including whether frequency is measured by claim event or individual claimant
  • Significant changes to those methodologies:
    • Treatment of claims that do not result in a liability
    • Information about significant changes in methodologies and assumptions used to calculate the liability for unpaid claims and claim adjustment expenses, including reasons for the change and the effects on the financial statements


In addition, the new standard also requires that the disclosures are disaggregated by the following areas to ensure that useful information is not obscured by the inclusion of a large amount of insignificant detail or the aggregation of items that have significantly different characteristics.

  • Type of coverage
  • Geography
  • Reportable segment
  • Market or customer type (personal, commercial)
  • Claims duration


These disclosure requirements are effective for annual reporting periods beginning after December 15, 2015 for private companies (calendar year 2016) and December 15, 2016 for private companies (calendar year 2017). Early adoption is permitted.

To see the entire FASB Lease Standard Update, click here.

For more information on how these guidance changes may impact your entity, contact Martha Hayes at Larson & Company, PC.