Current accounting rules for insurance companies are so different from those in other industries that they may not show investors the true economic realities the firms are facing, a top international accounting rulemaker said on Tuesday.
"Insurance accounting around the world is broken," said Tom Jones, vice chairman of the International Accounting Standards Board, at a Pace University accounting conference in New York.
To support his point, Jones said he believed the price-to-earnings ratios of insurance companies, a financial measure often used by investors to value a firm, would be much higher if insurance company bookkeeping was clearer.
However, he added that accounting rulemakers faced a challenge in revising insurance accounting standards.
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"Insurance accounting around the world is broken," said Tom Jones, vice chairman of the International Accounting Standards Board, at a Pace University accounting conference in New York.
To support his point, Jones said he believed the price-to-earnings ratios of insurance companies, a financial measure often used by investors to value a firm, would be much higher if insurance company bookkeeping was clearer.
However, he added that accounting rulemakers faced a challenge in revising insurance accounting standards.
Read More Article...
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