Financial Instruments—Insurance (Topic 944): Transition for Sold Contracts

Last updated on July 22, 2022. Please refer to the Current Technical Plan for information about the expected release dates of exposure documents and final standards.

(Sections updated on the date above are indicated with an asterisk *)



The objective of this project is to improve the transition provisions in Accounting Standards Update No. 2018-12, Financial Services—Insurance (Topic 944): Targeted Improvements to the Accounting for Long-Duration Contracts (LDTI), to remove the requirement to apply LDTI to contracts that have been derecognized because of a sale or disposal of individual or a group of contracts or legal entities before the LDTI effective date.


The Board issued the amendments in Update 2018-12 in August 2018 to improve, simplify, and enhance the financial reporting requirements for long-duration contracts issued by insurance entities. The effective dates of LDTI, as amended by Accounting Standards Update No. 2020-11, Financial Services—Insurance (Topic 944): Effective Date and Early Application, are as follows:

  1. For public business entities that meet the definition of a U.S. Securities and Exchange Commission (SEC) filer and are not smaller reporting companies, LDTI is effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal years. Early application is permitted.
  2. For all other entities, LDTI is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early application is permitted.
The LDTI transition provisions require retrospective transition. Specifically, an insurance entity is required to apply LDTI guidance as of the beginning of the earliest period presented (or as of the beginning of the prior period, if early application is elected).

Exposure Draft(s):

On July 14, 2022, the Board issued proposed Accounting Standards Update—Financial Services—Insurance (Topic 944): Transition for Sold Contracts. The due date for comment letters is August 8, 2022.
  • Download the proposed Accounting Standards Update

Comment Letters:

Read the comment letters on the proposed Accounting Standards Update.

Read the press release on the proposed Accounting Standards Update.

Decisions Reached at Last Meeting:

See meeting minutes.

Tentative Board Decisions Reached to Date:

See proposed Update.

The Board meeting minutes, handouts, and videos are provided for the information and convenience of constituents who want to follow the Board’s deliberations. All of the conclusions reported are tentative and may be changed at future Board meetings. Decisions become final only after a formal written ballot to issue a final standard.

The following are links to the minutes for each meeting.  To view Board meetings and handouts from the past 90 days, click here.
June 15, 2022 Board Meeting—The Board added a project to its technical agenda to address the application of the amendments in Update 2018-12 to contracts and legal entities sold before the effective date of LDTI. The Board directed the staff to draft a proposed Accounting Standards Update for vote by written ballot.

The Board will consider comment letter feedback on the proposed Accounting Standards Update.

Tiffany Wyszkowski
Project Manager

Katie Deakins
Postgraduate Technical Assistant

Natalie Vaughan
Postgraduate Technical Assistant

The staff has prepared this summary for information purposes only. Any Board decisions are tentative and do not change current accounting. Official positions of the FASB are determined only after extensive due process and deliberations.