CCIR Notes PDF
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These notes provide methods for calculating equity, including the fundamental accounting equation, prior year's equity, and line items from financial statements. They cover topics such as comprehensive income, net income, and other comprehensive income. Formulas and examples are included, relevant for understanding financial statement calculations.
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CCIR ==== Calculating equity ------------------ ### Method 1: Fundamental accounting equation Notation: - A(x) = assets for year x - L(x) = liabilities for year x - E(x) = equity for year x A(x) = L(x) + E(x) ### Method 2: From prior year's equity and current year's income Notation:...
CCIR ==== Calculating equity ------------------ ### Method 1: Fundamental accounting equation Notation: - A(x) = assets for year x - L(x) = liabilities for year x - E(x) = equity for year x A(x) = L(x) + E(x) ### Method 2: From prior year's equity and current year's income Notation: - CI(x) = comprehensive income for year x - NI(x) = net income for year x - OCI(x) = other comprehensive income for year x E(x) = E(x-1) + CI(x) CI(x) = NI(x) + OCI(x) \*This method assumes the company [did not] make certain kinds of transactions, like [dividends] for example, if dividends were paid, they must be [subtracted] from Net Income to arrive at the correct value for Equity [What Is Net Income? \| The Motley Fool](https://www.fool.com/terms/n/net-income/) -- good link for basics of net income calculation ### Method 3: Sum the appropriate line items from the Statement of Financial Position -- Liabilities & Equity, page 20.11 Notation - PHE(x) = Policyholders\' Equity for year x - SHE(x) = Shareholders\' Equity for year x - nci(x) = non-controlling interests for year x E(x) = PHE(x) + SHE(x) + nci(x) Q\) Identify the components of SHE\ A) (CP CORNA, CP but have second word "share" and shareholders equity is in question so that makes sense) - **C**ommon share - **P**referred shares - **C**ontributed surplus - **O**ther capital - **R**etained earnings - **N**uclear and other reserves - **A**OCI (accumulated other comprehensive income) Layout of financial statements ------------------------------ PC1 -- Core return be familiar with all pages in this file PC2 -- Quarterly return green sheets are the most important PC3 -- Annual return green sheets (10.60 and 60.45) are the most important ### PC1 20.10 Statement of Financial Position -- assets 20.11 Statement of Financial Position -- liabilities 20.22 Statement of Profit or Loss \*\*formula for Net Income (NI): Financial statement calculations -- basic quantities ---------------------------------------------------- ### Statement of financial position -- page 20.10 and 20.11 Most likely items to appear: - Total assets: page 20.10, line 89 - Total liabilities: page 20.11, line 399 - Total equity: page 20.11, line 699 ### Statement of profit or loss -- page 20.22 Notes on sheet in Excel NEED to memorize: NI = ISR + NIR + OIE -- taxes + discontinued operations ### Investment return -- page 40.74 Notes on sheet in Excel Battle quiz \#3 has good practice problems Financial statement calculations -- formulas from CCIR instructions ------------------------------------------------------------------- [Formulas - Basic Financial Statement Metrics - Exam 6 Canada](https://battleactsmain.ca/wiki6c/Formulas_-_Basic_Financial_Statement_Metrics#Formulas_for_Page_10.60) -- formulas for these questions ### Page 10.60 Battle quiz 4 is good for this one ### Page 60.25 Know formulas for insurance service result (ISR) and number of direct claims (in link above) - ISR = Insurance Service Result - +TIR = Total Insurance Revenue - -ISE = Insurance Service Expenses - +NRE = Net Reinsurance Expenses from Contracts Held In the end, make sure expenses are subtracted and then reinsurance is added (BA thinks its due to the wording of expenses "from") ### Pages 60.35 and 60.45 Know excess or (deficiency) formula -- in link above ### Excess (deficiency) using page 60.35 This is calculating excess or deficiency of loss reserves for all accident periods up until the current one (you can't calculate this for current AY since you don't have anything to compare it to) Very simple calculation and was historically asked on every exam pre-IFRS 17 ![](media/image2.png)\*On exam remember to state whether the final answer means **excess** or **deficient** or **neither**!!! Different ways to give the information for the problem: **Type of claim amounts** **Paid are** **How to handle in formula** --------------------------- -------------- ----------------------------------- Net Not included Must *also* subtract paid amounts Ultimate Included Don't subtract paid amounts Not sure if they all need to be memorized or not: **File Name** **Number** **Title** --------------- ------------- ------------------------------------------------------------------------- Core 20.10 Statement of Financial Position -- Assets 20.11 Statement of Financial Position -- Liabilities and Equity 20.22 Statement of Profit or Loss 20.41 Statement of Residual Interest -- Policyholders' Equity 20.42 OCI and AOCI 20.45 Head Office Account/Reserves 99.16 Certification Quarterly 40.74 Investment Return 60.25 Insurance Service Result (ISR) 60.80 Onerous Contracts 70.50/70.60 Insurance Contracts Held Summary -- Registered/Unregistered Reinsurance 80.15 Commissions Annual 10.60 Summary of Selected Financial Data for Five Years 60.45 Net Ultimate Claims and Adjustment Expenses -- Claims Development