The concern is that life insurers who use contingent assets
such as letters of credit to back the excess portion of reserves provide less protection for policyholders, the letter said.
In a section of the accounts, for the year ended December 2015, detailing the firm's contingent assets
and liabilities, the company says: "In December 2015 the Miller Group was successful in a legal action brought against one of its former customers.
Many high-profile companies, including broadcaster ITV, have since implemented similar de-risking programmes that have included the use of contingent assets
and other innovative solutions.
Similar to the stipulations in ASC 450, unless realization of income is "virtually certain," IAS 37 does not permit the recognition of contingent assets
The takeover comes along with an announcement that Hephaestus is going to demerge its newly formed investment company holding cash for investment leaving its legacy contingent assets
and liabilities behind in the company.
However, continued growth in the loan book has seriously strained the bank's liquidity, which could become more tenuous if some of its high level of contingent assets
were to move on to the balance sheet.
Blue-chip firms have hired consultants and are mooting deals with trustees of pension funds to use so-called contingent assets
, most commonly real estate, but also intellectual property
Corporate pension schemes known to have hefty pension deficits but which have not yet used contingent assets
include telecoms operator BT and the Royal Mail, which have deficits of around 7.
The Family Law Financial Affidavit form approved by the Florida Supreme Court likewise states that contingent assets
and liabilities must be listed as follows: "If you have any possible assets (income potential, accrued vacation or sick leave, bonus, inheritance, etc.
The accounting guidance for contingent assets
and liabilities arising from business combinations described above reflects revisions to guidance initially promulgated by the FASB.
Analysts believe BA could insure all or part of its liabilities through a buy-out deal with a specialised insurer or hedge specific risks such as the longevity of pensioners through a swap deal or pledge contingent assets
such as its real estate.
Tsakumis (lead author of this article) found that when presented with similar economic facts and financial reporting guidelines, accountants in the United States and Greece made different contingency recognition and disclosure decisions in their application of IAS 37, Provisions, Contingent Liabilities and Contingent Assets