Spring 2014 Q25 a
in COPLFR.SAO
I thought that discounts were considered in the SCOPE section in accounting basis for reserves, why is this not included as a possible correct answer?
Comments
I'm not sure if I understand what you're asking. I do see "discounts" as a possible correct answer? All the options show the discount amount, discount rate & basis. If I'm looking at the wrong item, please let me know.
My question concerns the "where" portion not the "what" portion, it only lists Exhibit B and relevant comments as correct locations , not the SCOPE section. But I think the SCOPE section does have discounting required disclosures considered under the accounting basis for reserves does it not?
In the SAO Scope section, many items are disclosed - but not directly in the write-up paragraphs itself. Rather, it is disclosed through a statement such as “reserves on which I am expressing an opinion reflect disclosure items in Exhibit B.” And Exhibit B is where you would see the specific discount amounts (in this case - but also other disclosures such as salvage/subro, UEPR, etc) So Exhibit B is a more directly correct answer. The Scope section really just vaguely refers to the disclosures in Exhibit B. I recommend looking up an actual SAO to help solidify this. Perhaps an answer of “Scope” would have received partial credit.
that makes sense. Thank you