| In the recognition and measurement of financial report as well as the disclosure of other financial reports, consistent financial accounting concepts should be used. An interrelated and consistent concept system is the Conceptual Framework of Financial Accounting, which takes the basic assumptions of financial accounting as premise and the goal as guide. Thus, the recognition, measurement and disclosure of the factors of financial report need to be directed under the Conceptual Framework of Financial Accounting. The main question discussed in this paper is the accounting of Reserve, that is, the Recognition, Measurement and Disclosure of Reserve in the process of discussing, Conceptual Framework of Insurance Accounting is necessary to be established as guidance. Reserve is a kind of fund reserve drawn from insurance income for insurance organizations to assume immature liability and deal with unsettled claims, whose quality varies according to different types of insurance contracts. Reserve has the characteristics of uncertainty, futurity and estimation, which lead that the actual sum compensated and paid by the insurance company should be decided ipso facto. By this token, Reserve drawn from insurance income is contingent liabilities, therefore, reserve should be recognized following the recognition standards of contingent liabilities, combined with the particularity of insurance itself. International Accounting Standards Committee (IASC) takes that the insurance contract belongs to financial instruments, whose most correlative measurement attribute is fair value, so the measurement attribute of reserve should also be fair value. Speaking more precisely, the measurement attribute of reserve is the present value of future cash flow whose measurement goal is fair value. The disclosure goal of reserve that takes fair value as its measurement attribute is also subject to the goal ofinsurance financial report, that is, to provide users of insurance accounting information which is useful for decision-making. Under this goal, the disclosure of reserve is not confined to the lists in accounting statement and the explanations in notes to the financial statement, but also includes the lists in supplementary statement and the explanations in the statement of financial position.The paper consists of five sections.The 1st section: The Construction of Conceptual Framework of Insurance Accounting. To further discuss the question of recognition, measurement and disclosure of reserve, a conceptual framework that is uniform in internal logic is demanded as a base and support. Therefore, it is indispensable to the research of reserve accounting to construct a sound Conceptual Framework of Insurance Accounting. Conceptual Framework of Financial Accounting is applicable to every walk of life, including insurance industry, but must be modified according to the characteristics of the industry when applied. Thus the Concept Framework of Insurance Accounting should be constructed based on Conceptual Framework of Financial Accounting, and combined with the characteristics of the insurance industry. The first section of this paper strives to complete the construction of Conceptual Framework of Insurance Accounting to provide a sound base for the research and development of the accounting question of recognition, measurement and disclosure of reserve in the following sections. The 2nd section: the quality of reserve. Considering from the point of accrual basis of insurance business, a part of fund that have already inflown should not be regarded as the accrued income but established in reserve because the time has not passed; another part of accounts payable that correspond to the accrued income but have not yet paid because of time should also be established in reserve. These reserve items should be transferred from the list of profit & loss (in which the income decreasesor the disburse increases) onto the list of the balance sheet. Reserve in BS limits the fund use space of opposite asset items, insures th... |
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