Deferred Acquisition Costs

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Deferred Acquisition Costs

In insurance, an expense to a customer that an insurance company initially pays, but recoups the funds from the customer gradually over the life of the insurance policy or other contract.
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Booth writes in a commentary published by Seeking Alpha that the net loss was partly due to a routine deferred acquisition cost (DAC) adjustment; that the company's core mortgage insurance units in Australia, Canada and the United States did well; that ending new life and fixed annuity sales should help cut costs without having much effect on revenue; and that the LTCI unit did well.
Insurance companies also pay premium taxes, state and federal income tax, capital gains tax, sales tax, and deferred acquisition cost taxes on reserves.
CHICAGO -- A very challenging macro environment is leading to goodwill impairments, negative deferred acquisition cost (DAC) unlocking, and other GAAP loss recognition associated with changes in long-term reserve assumptions.
Deferred Acquisition Costs: Under the framework described by the Discussion Paper, there will be no separate deferred acquisition cost (DAC) asset to account for the investment the insurer makes in the customer relationship.
ING Re, the report continues, will record an after-tax deferred acquisition cost write-off in third quarter 2004 for mortality mispricing.
Depressed financial markets, catastrophic events, rising costs of guarantees and options, deferred acquisition cost write-offs, concerns over reinsurance security and corporate scandals in the financial community have taken their toll on the insurance industry.
Early in 2012, similar to its peers, Lincoln took a retrospective accounting charge to write down a portion of its deferred acquisition cost balance.
Implementation of the Deferred Acquisition Cost (DAC) accounting change, which is expected to reduce adjusted operating income by $0.
04 per diluted share) for the accelerated amortization of deferred acquisition costs associated with the share class conversion in 2016.
FASB is striving to establish more uniformity with its redefinition of deferred acquisition costs, a move that will filter out many indirect expenses.
The AICPA staff, helped by industry experts, released a set of technical questions and answers (Q&As) on financial accounting and reporting issues related to Statement of Position 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts.
The AICPA Accounting Standards Executive Committee (AcSEC) issued Statement of Position (SOP) 05-1, Accounting by Insurance Enterprises for Deferred Acquisition Costs in Connection with Modifications or Exchanges of Insurance Contracts, effective for replacements occurring in fiscal years beginning after December 15, 2006.