Financial Sector (Collection of Data) (reporting standard) determination No. 53 of 2013 - LRS 300.0 - Statement of Financial Position

Link to law: https://www.comlaw.gov.au/Details/F2013L00121

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Financial Sector (Collection of Data) (reporting standard) determination No. 53 of 2013
Reporting Standard LRS 300.0 Statement of Financial Position
Financial Sector (Collection of Data) Act 2001
 
I, Ian Laughlin, delegate of APRA, under paragraph 13(1)(a) of the Financial Sector (Collection of Data) Act 2001 (the Act) and subsection 33(3) of the Acts Interpretation Act 1901:
 
(a)           REVOKE Financial Sector (Collection of Data) (reporting standard) determination No. 8 of 2009, including Reporting Standard LRS 300.0 Statement of Financial Position made under that Determination; and
 
(b)          DETERMINE Reporting Standard LRS 300.0 Statement of Financial Position in the form set out in the Schedule, which applies to the financial sector entities to the extent provided in paragraph 3 of the reporting standard.
 
Under section 15 of the Act, I DECLARE that the reporting standard shall begin to apply to those financial sector entities, and the revoked reporting standard shall cease to apply, on 1 January 2013.
 
This instrument commences on 1 January 2013.
 
Dated: 20 December 2012
 
[Signed]
 
 
Ian Laughlin
Member
 
Interpretation
In this Determination:
APRA means the Australian Prudential Regulation Authority.
financial sector entity has the meaning given in section 5 of the Act.
 
Schedule
 
Reporting Standard LRS 300.0 Statement of Financial Position comprises the 27 pages commencing on the following page.

Reporting Standard LRS 300.0
Statement of Financial Position
Objective of this Reporting Standard
This Reporting Standard sets out the requirements for the provision of information to APRA in relation to a life company’s financial position.   
It includes Form LRF 300.1 Statement of Financial Position (SF & SF Eliminations) and Form LRF 300.2 Statement of Financial Position (SF Total, GF, GF Elim, Entity), and associated specific instructions and must be read in conjunction with the general instruction guide.
 
Authority
1.             This Reporting Standard is made under section 13 of the Financial Sector (Collection of Data) Act 2001 (Collection of Data Act).
Purpose
2.             Information collected in Form LRF 300.1 Statement of Financial Position (SF & SF Eliminations) and Form LRF 300.2 Statement of Financial Position (SF Total, GF, GF Elim, Entity) (the LRF 300 series) is used by APRA for the purpose of prudential supervision including assessing compliance with capital standards.
Application and commencement
3.             This Reporting Standard applies to all life insurance companies including friendly societies (together referred to as ‘life companies’) registered under the Life Insurance Act 1995 (Life Insurance Act). This Reporting Standard applies for reporting periods ending on or after 1 January 2013.
Information required
4.             A life company must provide APRA with the information required by the LRF 300 series for each reporting period.
5.             The information reported to APRA under this Reporting Standard is not required to be given to policy owners pursuant to section 124 of the Life Insurance Act. It does not constitute a reporting document for the purposes of section 124.
Forms and method of submission
6.             The information required by this Reporting Standard must be given to APRA in electronic format using the ‘Direct to APRA’ application or, where ‘Direct to APRA’ is not available, by a method notified by APRA prior to submission.
Note: The ‘Direct to APRA’ application software may be obtained from APRA.
Reporting periods and due dates
7.             Subject to paragraph 8, a life company must provide the information required by this Reporting Standard:
(a)           in respect of each quarter based on the financial year of the life company on an unaudited basis; and
(b)          in respect of each financial year of the life company on an audited basis.
Note 1: This means that this form will be submitted five times for a full financial year.
Note 2: The annual audited form must be submitted in conjunction with the annual auditor’s report, as required under Prudential Standard LPS 310 Audit and Related Matters (LPS 310).
8.             If, having regard to the particular circumstances of a life company,  APRA  considers it necessary or desirable to obtain information more or less frequently than as provided by subparagraph 7(a) or 7(b), APRA may, by notice in writing, change the reporting periods, or specify reporting periods, for the particular life company.
9.             The information required by this Reporting Standard in respect of a life company must be provided to APRA:
(a)           within the time stated in Reporting Standard LRS 001 Reporting Requirements (LRS 001); or
(b)          in the case of information provided in accordance with paragraph 8, within the time specified by notice in writing.
Quality control
10.         The information provided by a life company under this Reporting Standard must be the product of systems, processes and controls that have been reviewed and tested by the Auditor of the life company. This will require the Auditor to review and test the life company’s systems, processes and controls supporting the reporting of the information to enable the life company to provide reliable financial information to APRA. This review and testing must be done on:
(a)           an annual basis or more frequently if necessary to enable the Auditor to form an opinion on the reliability and accuracy of data; and
(b)          at least a limited assurance engagement consistent with professional standards and guidance notes issued by the Auditing and Assurance Standards Board (AUASB) as may be amended from time to time, to the extent that they are not inconsistent with the requirements of LPS 310.
11.         All information provided by a life company under this Reporting Standard must be subject to systems, processes and controls developed by the life company for the internal review and authorisation of that information. It is the responsibility of the Board and senior management of the life company to ensure that an appropriate set of policies and procedures for the authorisation of data submitted to APRA is in place.
12.         Actuarial valuations and calculations included in or used in the preparation of the information provided to APRA must be in accordance with the prudential standards in force for the reporting period. However, life companies may use reasonable estimates when preparing information that will not be audited (i.e. for the first four submissions of information for a full financial year).
Authorisation
13.         When an officer of a life company provides the information required by this Reporting Standard using the ‘Direct to APRA’ software, it will be necessary for the officer to digitally sign the relevant information using a digital certificate acceptable to APRA.
14.         An officer of a life company submitting information under this Reporting Standard must be authorised by either:
(a)           the Principal Executive Officer of the life company; or
(b)          the Chief Financial Officer of the life company.
Variations
15.         APRA may, by written notice to the life company, vary the reporting requirements of the LRF 300 series in relation to that life company.
Transition
16.         A life company must report under the old reporting standard in respect of a transitional reporting period. For these purposes:
old reporting standard means the reporting standard revoked in the determination making this Reporting Standard (being the reporting standard which this Reporting Standard replaces); and
transitional reporting period means a reporting period under the old reporting standard:
(a)           which ended before the date of revocation of the old reporting standard; and
(b)          in relation to which the life company was required, under the old reporting standard, to report by a date on or after the date of revocation of the old reporting standard.
Note: For the avoidance of doubt, if a life company was required to report under an old reporting standard, and the reporting documents were due before the date of revocation of the old reporting standard, the life company is still required to provide any overdue reporting documents in accordance with the old reporting standard.
Interpretation
17.         In this Reporting Standard (including the attachments):
(a)           unless the contrary intention appears, words and expressions have the meanings given to them in Prudential Standard LPS 001 Definitions (LPS 001); and
(b)          capital standards means the prudential standards which relate to capital adequacy as defined in LPS 001;
Chief Financial Officer means the chief financial officer of the life company, by whatever name called;
financial year has the meaning in the Corporations Act 2001
general instruction guide refers to the general instruction guide set out in Attachment A of LRS 001;
Principal Executive Officer means the principal executive officer of the life company, by whatever name called, and whether or not he or she is a member of the governing board of the entity;
reporting period means a reporting period under subparagraph 7(a) or 7(b) or, if applicable, paragraph 8.


LRF_300_1 and LRF_300_2 Statement of Financial Position
These instructions must be read in conjunction with the general instruction guide.
Explanatory notes
Classes of business
This form is to be completed in respect of each class of business. This includes:
·           Australian business;
·           Overseas business; and
·           Total business
This refers to the territory where the life insurance business is carried on, as defined in the Life Insurance Act 1995 (the Act). All “Total business” values are derived items.
Inside and outside Australia
A number of items on this form are required to be split between ‘inside Australia’ and ‘outside Australia’. This differentiation relates to the territory where the assets are held, rather than the territory where the life insurance business is carried on.
Instructions for specific items
Assets
1.         Cash
Reporting of items 1.1 and 1.2 should be based on the territory where the assets are held.
1.1.        Held directly - in Australia; and
1.2.        Held directly - outside Australia
Report the value, as at the relevant date, of cash at call, including income accrued but not received.
1.3.        Sub-total cash held directly
This is calculated automatically as the sum of items 1.1 and 1.2.
1.4.        Look-through adjustment for assets held indirectly via unit trusts
Include look-through adjustment for cash held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts.
1.5.        Sub-total cash held effectively (unhedged positions)
This represents the effective holding in cash after adjustment for look-through of trusts and prior to adjustment for hedging.
This is calculated automatically within the forms.
1.6.        Hedging adjustments to or from cash
The hedging adjustment item is intended to translate the aggregate cash balance to the effective post-derivatives position.
1.7.        Total cash held effectively (hedged positions)
This represents the effective exposure to cash after adjustment for look-through of trusts and also after adjustment for hedging.
2.         Investment property
Property acquired or held which is available for sale, excluding owner-occupied property. Report the value after deducting accumulated depreciation.
Investment property should be consistent with the classification and measurement basis used in Australian Accounting Standard AASB 140 Investment Property (AASB 140).
Reporting of items 2.1 and 2.2 should be based on the territory where the assets are held.
2.1.        Held directly - in Australia
2.2.        Held directly - outside Australia
The value to be reported is the net market value, or fair value, of holdings of investment property, plus income accrued but not received in relation to this asset.
2.3.        Sub-total investment property held directly
This is calculated automatically as the sum of items 2.1 and 2.2.
2.4.        Look-through adjustment for assets held indirectly via unit trusts or by owner
Include look-through adjustment for investment property held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts, or for owner-occupied property initially entered as part of Item 11.
2.5.        Sub-total investment property held effectively (unhedged positions)
This represents the effective holding in property after adjustment for look-through of trusts/owner-occupied and prior to adjustment for hedging.
2.6.        Hedging adjustments to or from investment property
The hedging adjustment item is intended to translate the aggregate investment property balance to the effective post-derivatives position.
2.7.        Total investment property held effectively (hedged positions)
This represents the effective exposure to property after adjustment for look-through of trusts/owner-occupied and also after adjustment for hedging.
This is calculated automatically within the forms.
3.         Equities/unit trusts
All holdings in unit trusts are initially included in this section, before applying the look-through adjustments.
Reporting of items 3.1 to 3.6 should be based on the territory where the assets are held.
3.1.        Held in Australia - directly as listed or unlisted equities
Include both listed (ownership interest in a company listed on the ASX or an overseas exchange) and unlisted equities that are held directly.
3.2.        Held in Australia - directly in associated, subsidiary or controlled entities
Ownership interest in any associated, subsidiary and controlled entities, excluding preference shares.
Refer to the Act for definitions of associated, subsidiary or controlled entities.
3.3.        Held in Australia - directly as convertible notes (Equity exposure)
All equities-related items such as convertible notes and other hybrid securities which, taking into account market conditions, have attributes that demonstrate exposure to equities markets.
3.4.        Held in Australia - directly as controlled unit trusts
This is the fair value of investments in controlled trusts, plus income accrued but not received in relation to these assets.
3.5.        Held in Australia - directly as listed unit trusts
This is the fair value of investments in listed unit trusts, plus income accrued but not received in relation to these assets.
3.6.        Held in Australia - directly as unlisted unit trusts
This is the fair value of equity investments in unitised trusts, plus income accrued but not received in relation to these assets.
Unitised trusts are a type of managed investment which issues units representing equal shares in the trust's investments. The value of the units fluctuates in line with the value, and income received from, the underlying investments
3.7.        Held directly – outside Australia
This is the fair value of investments in equities and unit trusts, plus income accrued but not received in relation to these assets that are held outside Australia.
3.8.        Sub-total equities/unit trusts held directly
This is calculated automatically by as the sum of items 3.1 to 3.7.
3.9.        Look-through adjustment for assets held indirectly via unit trusts etc
Include look-through adjustment for equities held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts.
3.10.     Sub-total equities held effectively (unhedged positions)
This represents the effective holding in equity after adjustment for look-through of trusts and prior to adjustment for hedging.
3.11.     Hedging adjustments to or from equities
The hedging adjustment item is intended to translate the aggregate equities balance to the effective post-derivatives position.
3.12.     Total equities held effectively (hedged positions)
This represents the effective exposure to equity after adjustment for look-through of trusts and also after adjustment for hedging.
4.         Non-indexed interest bearing securities (IBS)
Non-indexed IBS are interest bearing securities that are not indexed (see item 5 below).
Reporting of items 4.1 to 4.3 should be based on the territory where the assets are held.
4.1.        Held in Australia - directly as non-indexed IBS assets
This is the fair value, of non-indexed pure (i.e. non hybrid) debt securities, plus income accrued but not received in relation to this asset.
4.2.        Held in Australia - directly as convertible notes (IBS exposure)
This is the fair value of all IBS-related items such as convertible notes and other hybrid securities which, taking into account market conditions, have attributes that demonstrate exposure to IBS markets.
4.3.        Held directly - outside Australia
This is the fair value of non-indexed IBS assets, plus income accrued but not received in relation to these assets that are held outside Australia.
4.4.        Sub-total non-indexed IBS held directly
This is calculated automatically as the sum of items 4.1 to 4.3.
4.5.        Look-through adjustment for assets held indirectly via unit trusts
Include look-through adjustment for non-indexed IBS held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts.
4.6.        Sub-total non-indexed IBS held effectively (unhedged positions)
This represents the effective holding in non-indexed IBS after adjustment for look-through and prior to adjustment for hedging.
4.7.        Hedging adjustments to or from non-indexed IBS
The hedging adjustment is intended to translate the aggregate non-indexed IBS balance to the effective post-derivatives position.
4.8.        Total non-indexed IBS held effectively (hedged positions)
This represents the effective exposure to non-indexed IBS after adjustment for look-through of trusts and also after adjustment for hedging.
5.         Indexed interest bearing securities (IBS)
Indexed IBS are interest bearing securities with a payment stream that increases by an indexation factor; the most common being the rate of inflation.
Reporting of items 5.1 and 5.2 should be based on the territory where the assets are held.
5.1.        Held directly - in Australia; and
5.2.        Held directly - outside Australia
This is the fair value of indexed IBS assets, plus income accrued but not received in relation to these assets.
5.3.        Sub-total indexed IBS held directly
This is calculated automatically as the sum of items 5.1 and 5.2.
5.4.        Look-through adjustment for assets held indirectly via unit trusts
Include look-through adjustment for indexed IBS held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts.
5.5.        Sub-total indexed IBS held effectively (unhedged positions)
This represents the effective holding in indexed IBS after adjustment for look-through of trusts and prior to adjustment for hedging.
5.6.        Hedging adjustments to or from indexed IBS
The hedging adjustment item is intended to translate the aggregate indexed IBS balance to the effective post-derivatives position.
5.7.        Total indexed IBS held effectively (hedged positions)
This represents the effective exposure to indexed IBS after adjustment for look-through of trusts and also after adjustment for hedging.
6.         Sub-total of non-indexed IBS and indexed IBS
This aggregate IBS balance is the sub-total of non-indexed IBS and indexed IBS, in terms of effective exposure.
7.         Loans
Include financial leases and mortgages. Note that loans differ from interest bearing securities as usually the asset is not negotiable (i.e. able to be traded on a secondary market).
Reporting of items 7.1 to 7.5 should be based on the territory where the assets are held.
7.1.        Held in Australia - directly as loans on policies
Loans on policies are loans (usually to a policy owner) that are secured by the surrender value of the policy.
7.2.        Held in Australia - directly to associated, subsidiary and controlled entities
Include loans to any associated, subsidiary and controlled entities.
Refer to the Act for definitions of associated, subsidiary or controlled entities.
7.3.        Held in Australia - directly in public sector or as secured
Include all loans to the public sector (loans to National, State or Local Governments or government enterprises) and secured loans (loans secured by a charge over assets, including debentures) to other borrowers.
7.4.        Held in Australia - directly as unsecured
Include loans (to private sector entities) that are not secured by a charge over assets.
7.5.        Held directly - outside Australia
This is the fair value of all loans including financial leases and mortgages that are held outside Australia.
7.6.        Sub-total loans held directly
This is calculated automatically as the sum of items 7.1 to 7.5.
7.7.        Look-through adjustment for assets held indirectly via unit trusts
Include look-through adjustment for loans held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts.
7.8.        Sub-total loans held effectively (unhedged positions)
This represents the effective holding in loans after adjustment for look-through of trusts and prior to adjustment for hedging.
7.9.        Hedging adjustments to or from loans
The hedging adjustment item is intended to translate the aggregate loans balance to the effective post-derivatives position.
7.10.     Total loans held effectively (hedged positions)
This represents the effective exposure to loans after adjustment for look-through of trusts and also after adjustment for hedging.
8.         Sub-total of debt securities (IBS and loans)
Aggregate debt assets balance. This is the sub-total of IBS and loans, in terms of effective exposure.
9.         Other investment assets
Include all other investment assets, for example, direct holdings of commodities such as gold.
Reporting of items 9.1 and 9.2 should be based on the territory where the assets are held.
9.1.        Held directly - in Australia; and
9.2.        Held directly - outside Australia
Report the value of all other investment assets here.
9.3.        Sub-total other investment assets held directly
This is calculated automatically as the sum of items 9.1 and 9.2.
9.4.        Look-through adjustment for assets held indirectly via unit trusts
Include look-through adjustment for other investment assets held indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts.
9.5.        Sub-total other investment assets held effectively (unhedged positions)
This represents the effective holding in other investment assets after adjustment for look-through of trusts and prior to adjustment for hedging.
9.6.        Hedging adjustments to or from other investment assets
The hedging adjustment item is intended to translate the aggregate other investment assets balance to the effective post-derivatives position.
9.7.        Total other investment assets held effectively (hedged positions)
This represents the effective exposure to other investment assets after adjustment for look-through of trusts and also after adjustment for hedging.
10.      Receivables
Do not include accrued income from investment assets, which is to be included with the appropriate investment principal.
Include outstanding premiums (item 10.1), but not deferred acquisition cost arising in respect of policies, which are to be included as part of the calculation of policy liabilities.
Note that this treatment differs from the Australian Accounting Standards.
Reporting of items 10.1 to 10.4 should be based on the territory where the assets are held.
10.1.     Held in Australia - as outstanding premiums
Report the amount related to insurance premiums due but not yet received, net of any provision for doubtful debts.
10.2.     Held in Australia - as investment receivables
Report the amount due but not yet received in relation to investment assets, excluding any amounts related to income accrued but not yet received.
10.3.     Held in Australia - as other receivables
Report the amount of any other receivables not categorised above in items 10.1 and 10.2   This includes sundry debtors and prepayments and accrued income for assets of the fund which are not traded securities, such as operating assets. This does not include accrued income from traded securities which is to be included with the principal amount.
For friendly societies, this item is the value of seed capital that is a receivable for the management fund.
10.4.     Held outside Australia - all receivables
Report the amount related to all receivables that are held outside Australia.
10.5.     Total receivables
This is calculated automatically as the sum of items 10.1 to 10.4.
11.      Non-investment assets
Reporting of items 11.1 to 11.9 should be based on the territory where the assets are held.
11.1.     Held in Australia - as (owner-occupied) property, plant and equipment
Include owner-occupied property, furniture, equipment (excluding information technology), re-modelling costs to existing premises, and interest capitalised during the period of construction of buildings in accordance with Australian Accounting Standard AASB 116 Property, Plant and Equipment (AASB 116) Report the net value after deducting accumulated depreciation from the total amount.
11.2.     Held in Australia - as gross policy liabilities ceded under reinsurance
The sum of insurance liabilities, financial instrument liabilities and management services element liabilities ceded under reinsurance held in Australia. For reinsurance held outside Australia, see item 11.7.
Outwards reinsurance that meets the definition of an insurance contract consists of both a reinsured best estimate liability and the value of reinsured profit margins.
11.3.     Held in Australia - as deferred tax assets
This is the value of deferred tax assets as per the Australian Accounting Standards.
11.4.     Held in Australia - as goodwill and other intangible assets
This item reports the total value of all goodwill and intangible assets net of impairment as reflective on the statement of financial position.
11.5.     Held in Australia - as other assets
Include all other assets not specifically categorised above, including unreconciled suspense and clearing accounts with debit balances. It is calculated automatically as item 11.6 less the sum of items 11.1 to 11.4.
11.6.     Held in Australia - Total non-investment assets
This is the value of any asset that has not been classified as an investment asset, other than a receivable.
11.7.     Held outside Australia - as gross policy liabilities ceded under reinsurance
The sum of insurance liabilities, financial instrument liabilities and management services element liabilities ceded under reinsurance held outside Australia. For reinsurance held in Australia, see item 11.2.
Outwards reinsurance that meets the definition of an insurance contract consists of both a reinsured best estimate liability and the value of reinsured profit margins.
11.8.     Held outside Australia - other non-investment assets
This is the value of any asset that has not been classified as an investment asset, other than a receivable that is held outside Australia.
It is calculated automatically as item 11.9 less item 11.7.
11.9.     Held outside Australia - Total non-investment assets
This is the value of any asset that has not been classified as an investment asset, other than a receivable.
11.10.  Look-through adjustment for owner-occupied property
This item is intended to translate the exposure to owner-occupied property from item 11 to item 2 (investment property).
11.11.  Total non-investment assets
This is calculated automatically as the sum of items 11.7, 11.9 and 11.10.
Liabilities
13.      Borrowings
Include the outstanding balances of borrowings from financial institutions and other borrowings.
13.1.     Direct – secured
Include borrowings that are secured by a charge over assets.
13.2.     Direct – unsecured
Include borrowings that are not secured by a charge over assets.
13.3.     Direct - seed capital
Seed capital must be reported separately from borrowings. This reporting item only applies to friendly societies.
13.4.     Sub-total direct borrowings
This is calculated automatically as the sum of items 13.1 to 13.3.
13.5.     Look-through adjustment for borrowings drawn indirectly via unit trusts
Include look-through adjustment for borrowings drawn indirectly via listed unit trusts, unlisted unit trusts or controlled unit trusts. This is in effect adjusting for recognition of ‘geared’ positions in unit trusts.
13.6.     Sub-total borrowings drawn effectively (unhedged positions)
This is calculated automatically as the sum of items 13.4 and 13.5.
13.7.     Hedging adjustments to or from borrowings
The hedging adjustment item is intended to translate the aggregate Borrowings balance to the effective post-derivatives position.
13.8.     Total borrowings drawn effectively (hedged positions)
This is calculated automatically as the sum of items 13.6 and 13.7.
14.      Total creditors
Show the total of creditors, including account payables. Do not include overdrafts here, these should be disclosed as borrowings.    
15.      Provisions
15.1.     Current tax liabilities
Includes items of income tax described as inter-company tax liability by virtue of the life company being part of a tax consolidation group.
15.2.     Deferred tax liabilities
This is the value of deferred tax liabilities in accordance with Australian Accounting Standards.
15.3.     Other provisions
Include the amount of other provisions such as employee entitlements. It is calculated automatically as item 15.4 less the sum of items 15.1 and 15.2.
15.4.     Total provisions
This is the total of all provisions held in accordance with Australian Accounting Standards.
16.      Gross policy liabilities assumed directly
Gross policy liabilities are to be valued in accordance with Prudential Standard LPS 340 Valuation of Policy Liabilities.
Include liabilities for deferred fee revenue and deferred acquisition costs, and non-life policy liabilities. For participating benefits, include bonuses in respect of the current year.
For friendly societies, this item must include any unallocated surpluses that have been classified as liabilities. Unallocated surplus classified as liabilities included in this item relates to all other unallocated surpluses that have not been included in item 25.1 of this form.
16.1. Of which: Unallocated surplus
For friendly societies only, this item is the unallocated surplus remaining after distributions to benefit fund members.
16.2. Of which: Unallocated distributable surplus
For friendly societies only, this item is the maximum amount of unallocated surplus shown in item 16.1 that could be immediately distributed to benefit fund members without causing a breach of the capital adequacy standards.
17.      Gross policy liabilities assumed under reinsurance
This is similar to reporting item 16 Gross policy liabilities, except that it pertains to inwards reinsurance business.
A life company whose principal business is reinsurance is expected to enter their policy liabilities at this item.
18.      Policy owner retained profits
Value of statutory fund profits allocated to participating policy owners generally, but not yet vested as specific amounts to particular policies.
Australian Accounting Standard AASB 1038 Life Insurance Contracts (AASB 1038) prevents the recognition of negative policy owner retained profits.
Negative policy owner retained profits should be disclosed in LRF 340.1 Retained Profits (SF and SF Eliminations) (LRF 340.1).
19.      Premiums in advance
This is to be reported in accordance with Australian Accounting Standards.
20.      Subordinated debt
20.1.     Eligible amounts
The non-eligible amount is the current total value of the subordinated debt which has been issued by the statutory fund and meets the eligibility criteria as per Attachment E of Prudential Standard LPS 112 Capital Adequacy: Measurement of Capital (LPS 112).
20.2.     Non-eligible amounts
The non-eligible amount is the current total value of the subordinated debt which has been issued by the statutory fund but does not meet the eligibility criteria as per Attachment E of LPS 112.
20.3.     Total subordinated debt
Total approved subordinated debt is the current total value of the subordinated debt which has been issued by the statutory fund.
It is calculated automatically as the sum of item 20.1 and item 20.2.
21.      Other liabilities
21.1.     Other liabilities
This is automatically calculated as item 21.3 less item 21.2.
21.2.     Hedging adjustments to or from other liabilities
The hedging adjustment item is intended to translate the aggregate other liabilities balance to the effective post-derivatives position.
21.3.     Total other liabilities
This is all other liabilities that are not specifically categorised above, including unreconciled suspense and clearing accounts with credit balances.
23.      Net assets
This is automatically calculated as item 12 Total assets less item 22 Total liabilities.
Components of net assets
24.      Foreign currency translations
The treatment of foreign currency translation is set out in the relevant accounting standards. Entities must determine whether (some or all of) the resulting amounts represent a component of operating profit (loss) for the purposes of the Act.
This item would generally only be expected to apply at the general fund level as all operating profit (loss) of a statutory fund must be allocated to retained profits in accordance with sections 59 and 60 of the Act. A life company reporting a balance at the statutory fund level should be able to identify how its creation is consistent with the requirements of the Act.
25.      Reserves
25.1.     Unallocated benefit fund reserves
For defined benefit business, this item includes:
·                the unallocated surplus that must be transferred to the management fund under the approved benefit fund rules; and
·                the unallocated surplus that may be transferred to the management fund or used for benefit enhancement under the approved benefit fund rules.
This item does not apply to defined contribution business.
25.2.     Other reserves
This is a balancing item and includes all other reserves not specifically categorised above. It is automatically calculated as item 25.3 less item 25.1.
25.3.     Total reserves
This is the value of the total of all reserves that have been measured and disclosed in accordance with relevant Australian Accounting Standards
26.      Share Capital
Includes all share capital, e.g. ordinary shares, preference shares etc recognised as capital for the purposes of Prudential Standards LPS 001 Definitions.
27.      Shareholders' Retained Profits
This represents the sum of shareholders’ retained profits (or accumulated losses) at beginning of the period and the profit (or loss) after income tax attributable to shareholders for the reporting period, after any transfers to or from reserves.
28.      Total Components = Life Insurance Act Net Assets
This represents the sum of component items making up net assets, and must equal the derived item for net assets shown at item 23.
Annual return reconciliations
(Only complete for annual returns)
Reconciliation to net assets at the end of the period in the general purpose financial statements is only required to be completed as part of the annual returns.
29.      Reconciliation adjustments
This is the adjustment necessary to reconcile the Total components of net assets (item 28) as defined under the Act to the net assets per general purpose accounts (item 30). APRA does not propose to routinely collect the components of the reconciliation. Additional information may, however, be sought from the life company where this figure is significant.
30.      Net assets, per general purpose accounts - balance sheet
This is the corresponding figure to ‘Total Components = ‘Life Insurance Act Net Assets’ (item 28), except that it is taken from the general purpose accounts of the entity.