Deriving GAAP Surplus from SAP Surplus
Is there a full formula for how to get GAAP Surplus given SAP Surplus? (E.g. All the potential adjustments like provision for reins., etc.)
It looks like you're new here. If you want to get involved, click one of these buttons!
Is there a full formula for how to get GAAP Surplus given SAP Surplus? (E.g. All the potential adjustments like provision for reins., etc.)
Comments
There isn't such a formula given in the text and I doubt such a formula exists.
In the wiki, I provided a simple formula that works just for the exam problems I referenced, but in general there are likely too many "nooks and crannies" that comprise the totality of differences between SAP and GAAP for there to be a formula that would always work. That's something that probably requires the expertise of an accountant to sort out.
I think here, the CAS just wants you to be aware that there are important differences between SAP and GAAP and to have a basic idea of what some of those differences are.