Podiatrist's encounter many foot problems during and after pregnancy.
From cramps and itchiness to swelling and aching, our feet can often
feel very uncomfortable throughout pregnancy and following the birth.
Hormonal changes and natural weight gain have a huge impact on the body
and the feet bear the brunt of the major changes that a woman's body
will go through.
Swollen feet, swollen ankles and arch and heel
pain are the main causes of foot pain in pregnant women. Muscles and
ligaments stretch and soften because of an increase in the ovarian
hormone relaxin, which makes your feet more prone to ankle and ligament
strains on a daily basis.
The choice of footwear can also be a
factor in the cause of foot problems during pregnancy. A shoe with a
heel of approximately 1.2in (3cm) is recommended as they will help to
shift the weight further forward on the feet. This can help to reduce
any pain or discomfort. Wide fitting and supportive shoes will minimise
discomfort and help to avoid long term damage. Choosing a shoe with a
strap can help the shoe to stay in place although fiddly straps can
sometimes cause problems in later stages of the pregnancy when you may
struggle to reach your feet.
If high heels are a must they should
only be worn occasionally or when you know you will be able to sit down
through the day. On a daily basis, a supportive shoe should be worn.
When
shopping for shoes try to shop later in the day as feet can swell
throughout the day. Ensure that the shoes fit well before you leave the
shop as it is a common myth that you can break in a pair of shoes - this
is not true. Shoes with a round or square toe are recommended. If you
are buying boots, make sure that there is room in the calf area as they
calves can swell. Choose a boot with a side zip fastening as they will
be easier to take on and off - this will be much more appreciated
towards the end of your pregnancy!
Keeping active is also
recommended to help reduce the risk of cramps and swelling. Do check
with your midwife or GP before starting an exercise program.
If
you do experience arch pain or general foot pain make an appointment
with your Podiatrist to see how he or she could help you. If necessary
an orthotic device can be prescribed to make your feet feel much more
comfortable - as any pregnant woman will know, this may provide much
needed relief.
Saturday, June 30, 2012
Thursday, June 28, 2012
Measures of state regulation of insurance activities
Government regulation is an essential element and the principle of insurance business in any country. The purpose of government regulation is to ensure the formation and development of well-functioning insurance market, creating the necessary conditions for the insurers of various legal forms, protecting the interests of policyholders.
The system of state regulation include the following:
A. Licensing - registration of insurance companies and the issuance of licenses to conduct certain types of insurance. Licensed to conduct insurance business issued in accordance with the Terms of the licensing of insurance activity in the Russian Federation. These conditions are determined by:
form of license and its details;
requirements for the licensee (the fact of registration as a legal entity, the payment of the authorized capital requirements for its size depending on the type of insurance);
list of the documents applied to the application for a license (the founding documents, the documents confirming payment of the authorized capital, the business plan for the first year of operation, the calculation of the ratio of assets and liabilities on the appropriate form, a statute on the formation and use of insurance reserves, if necessary, a plan to Reinsurance balance of the application report on the financial results of the last reporting date, the plan placement of insurance reserves by insurance rules, the calculation of insurance rates on the appropriate form, information about the director and his deputies);
order of consideration of documents and issuance of license;
order of publication of the insurers that have received licenses.
For the license fee in the prescribed manner, which comes to the budget. If found in violation of the insurance companies state agency for supervision of insurance business has the right to suspend or restrict a license or to make a decision on its withdrawal. Refusal to issue a license, its revocation, suspension and limitation of action may be appealed in court.
Two. Control over the financial stability of insurers. The main factors of financial stability of insurance company:
sufficient equity capital;
the size of the liabilities (including technical provisions);
asset allocation;
portfolio of risks transferred to reinsurance;
tariff policy.
Three. Develop forms and procedures of statistical reporting and monitoring the timely submission of financial statements of insurance companies.
4. Taxation of insurers and policyholders.
Five. Other measures of state regulation of insurance activities, including the responsibility for avoiding damages from the insurer when the insured event.
The system of state regulation include the following:
A. Licensing - registration of insurance companies and the issuance of licenses to conduct certain types of insurance. Licensed to conduct insurance business issued in accordance with the Terms of the licensing of insurance activity in the Russian Federation. These conditions are determined by:
form of license and its details;
requirements for the licensee (the fact of registration as a legal entity, the payment of the authorized capital requirements for its size depending on the type of insurance);
list of the documents applied to the application for a license (the founding documents, the documents confirming payment of the authorized capital, the business plan for the first year of operation, the calculation of the ratio of assets and liabilities on the appropriate form, a statute on the formation and use of insurance reserves, if necessary, a plan to Reinsurance balance of the application report on the financial results of the last reporting date, the plan placement of insurance reserves by insurance rules, the calculation of insurance rates on the appropriate form, information about the director and his deputies);
order of consideration of documents and issuance of license;
order of publication of the insurers that have received licenses.
For the license fee in the prescribed manner, which comes to the budget. If found in violation of the insurance companies state agency for supervision of insurance business has the right to suspend or restrict a license or to make a decision on its withdrawal. Refusal to issue a license, its revocation, suspension and limitation of action may be appealed in court.
Two. Control over the financial stability of insurers. The main factors of financial stability of insurance company:
sufficient equity capital;
the size of the liabilities (including technical provisions);
asset allocation;
portfolio of risks transferred to reinsurance;
tariff policy.
Three. Develop forms and procedures of statistical reporting and monitoring the timely submission of financial statements of insurance companies.
4. Taxation of insurers and policyholders.
Five. Other measures of state regulation of insurance activities, including the responsibility for avoiding damages from the insurer when the insured event.
Organizational and legal form of insurance companies
In the insurance market of the Russian Federation there are insurance companies with different legal forms (joint stock company, limited liability company, etc.).
Russian legislation does not impose any exemptions on the organizational-legal forms of insurance companies. The only requirement is that, as the insurer may be made only by a legal entity.
The founders of the insurance company can be both physical and legal persons, including foreign ones.
The Russian insurance legislation stands as a special form, which can be created by the insurer, Mutual Insurance Company (Allied). (Federal Law "On Organization of Insurance in the Russian Federation" does not refer to the OBC category "insurance companies").
Rooted in the historical past, a mutual insurance company because of the specific organization, asset ownership and management have successfully compete in today's insurance market of many countries with joint-stock insurance companies. Mutual Insurance Company - a legal form of an insurance organization in which each policyholder is also a member of the insurance company. Allied - an association of insurers in order to co-create a certain kind of insurance products for members of the society.
In accordance with the legislation of mutual insurance companies are non-profit organizations.
One form of commercial co-operation of insurance companies is the co-insurance (co). In the developed form, this leads to the creation of pools, insurance associations and clubs. The purpose of their creation - providing methodical and organizational assistance to its founders, co-ordination of their activities for the various types of insurance, participation in the preparation of legislation to promote scientific development, etc.
The organization of insuranc
Principles of Insurance in the Russian Federation
The main feature of the fundamental organization of insurance business in the modern period (in contrast to the Soviet era) is its monopolization and the development of competitive insurance companies. In the process of transition to market relations, public insurance (in the sense of insurance companies owned by the state) has practically disappeared from the insurance market. The vast number of insurance companies operating in Russia, is privately owned.
The competition operates not only in the field of voluntary insurance, but also in the field of compulsory insurance (such as between insurers engaged in CTP, between health insurance organizations engaged in compulsory health insurance). The competition encourages insurance companies to develop and introduce new types of insurance, they constantly improve, expand the range and reach additional segments of the insurance market.
In carrying out the same kinds of insurance competition between insurance companies is reflected in the creation of suitable forms of contract execution and payment of insurance premiums, reducing tariff rates, timeliness of payment of insurance compensation and insurance coverage. In addition, it stimulates the improvement of the models themselves insurance - in recent years begun to develop a model of direct insurance, the essence of which consists in the rejection of the mediators.
Competition in all areas - the main condition for the transition to a market economy.
However, the insurance - a special kind of activities designed to provide insurance protection to individuals and legal entities. It is therefore important to organize the insurance that insurance companies are not ruined, did not cease their activities. This is achieved by special methods of state regulation of insurance activities, as well as the development of a clear legal and economic basis of insurance. Hence the second principle - the need for state regulation of insurance activities, based on a strong legal and economic foundation.
Competition in the insurance, the inherent competition can not be regarded as an absolute category. In many cases, especially when taking large risks insurance, requires the cooperation of insurers. This cooperation takes the form of coinsurance and reinsurance. An important principle of organization of insurance as part of international economic relations, international cooperation is in the insurance industry, which is caused by an objective necessity in terms of deepening and expanding economic ties.
Thus, the cooperation of insurance companies both domestically and abroad is also an important principle of organization of insurance business.
Insurance
Insurance - a special kind of economic relations, designed to provide insurance protection for people and their affairs from various dangers.
Insurance (insurance) in the widest sense - includes various types of insurance (actually insurance, or primary insurance, reinsurance, coinsurance), which together provide insurance protection.
Insurance in the narrow sense of a relationship (between the insured and the insurer) to protect the property interests of individuals and legal entities (insurers) upon the occurrence of certain events (insurance claims) at the expense of funds (hedge funds) that are generated from premiums paid by them (the insurance premium .)
The relationship between the insurer and the insured, determining exactly how the insurance fund will be formed and how it is spent, is a method of creating insurance products. In the process of historical development was worked out three methods for the creation of insurance products - self-insurance, mutual insurance, commercial insurance.
Insurance (insurance) in the widest sense - includes various types of insurance (actually insurance, or primary insurance, reinsurance, coinsurance), which together provide insurance protection.
Insurance in the narrow sense of a relationship (between the insured and the insurer) to protect the property interests of individuals and legal entities (insurers) upon the occurrence of certain events (insurance claims) at the expense of funds (hedge funds) that are generated from premiums paid by them (the insurance premium .)
The relationship between the insurer and the insured, determining exactly how the insurance fund will be formed and how it is spent, is a method of creating insurance products. In the process of historical development was worked out three methods for the creation of insurance products - self-insurance, mutual insurance, commercial insurance.
Business Security
Types of insurance business
Do you have your own business? Do you want to sleep? Who does not want to. Let's think about what we do not have enough to do so.
You are making every effort to protect against various negative factors surrounding your business? You need to improve the financial stability of your business and become more attractive to partners? Do you want to increase the amount of working capital and a loan in the bank, but the bank requests the guarantee safeguarding of assets? All these problems can be solved through the insurance of their business. If you are looking for answers to the above questions, then this material will be useful for you! Most private beauty salons, notaries, audit companies, small hospitals are small businesses, which employ a small staff. But people are people. And the "human factor" no one has canceled. Price errors can be very high: God forbid would suffer serious harm to human health or the client's documents vkradetsya inaccuracy. Life is life, and therefore a mistake, even a top expert can not be excluded.
Insurance can not prevent the onset of this "insurance" case, but allows you to greatly offset the potential damage that will be caused to a particular company or business in general negligent actions of perpetrators or third parties. And insuring his liability to customers. can be avoided not only a long litigation, but also to solve a complex problem - not only to preserve the good name, but also a client.
The experience of developed countries shows that, without proper evaluation and organization of insurance risks can not effectively operate any enterprise. Some countries even impose compulsory insurance of liability of legal persons for any damage. Unfortunately, the insurance firm in Russia was not included in the customs of business turnover. It is hoped that businessmen second and third generations will realize that it is better to pay a lesser amount for an insurance policy than to lose business because of one serious injury.
Today, small and medium-sized businesses are constantly on the brink of risk. Organize a company - is simple enough. But to keep the business "afloat" can not much. After all, even with a stable sales of all you can lose in one day. Fires, accidents and fire key employees - all of this poses a threat not only profit but also its very existence. However, the unpleasant consequences can be minimized. To do this, and there is an institute of insurance business.
For example, a hairdresser's financial district is much less stable than the fashion-largest holding. And the fact that the latter only in trouble for a small company can become a disaster. Since the flooding neighbors "on top" is likely to entail significant repair of the hall. However, the budget of the merchant does not always provide the cost of unplanned repairs. The suspension of activity in this case is inevitable.
What, here, interested business owner - to compensate possible losses. It is important that the insurance amount for which insured the enterprise consistent with possible losses when the insured event, as payment for an occurrence is often the only source for an entrepreneur to cover the damage.
The second point, which plays an important role - the size of the premium. Generally, all funds by small and medium businesses are investing in the business. Often, in the event of force majeure, they do not even have the reserves to mitigate its consequences. But despite this, few entrepreneurs decided to spend the money on insurance, but insurance costs are only one percent of the amount of possible losses. For reasons of economy, as well as following the old Russian tradition, small businesses still prefer to rely on "maybe".
Today, insurance companies (insurers) include small business insurance package the following types of insurance:
- Property Insurance - allows you to insure property risks associated with the operation and use: office space, equipment, furniture and goods in warehouses, etc. And also in case of theft, damage or other adverse effects. In the insurance case, the insurance company will compensate the victim company (Insured) damages in full, provided that the sum insured corresponds to the actual value of the insured property. In the case of "nedostrahovaniya" property insurer (by law) shall be entitled to pay only a fraction of the damage, equal to the ratio of the sum insured to the actual value of the property;
- Liability insurance - allows you to insure the Insured's liability for damage to third parties (eg customers), upon presentation of their claims against the company. For example, a master barber messed up hair, the client (painted a different color or retain moisture.) Or the provision of spa services, under the influence of chemically active substances (prof.kosmetika) damaged the health of the client, etc. In this case, the victim may make a complaint to the company or its owner. And what do the latter, if he does not have available funds for redress? This is where the rescue contract professional liability insurance. It should be noted that the insurance company will fulfill the requirement for damages only to the extent of the sum insured.
- Insurance against business interruption - allows you to insure losses arising from unplanned interruptions in production. Often a business small business is concentrated in one place (usually a rental office). In case of fire in the office of the company's activity will be effectively paralyzed. Enforced absence from the company will incur a loss: loss of profit, additional costs in order to reduce damage; unavoidable operating costs (staff salaries, rent, taxes, depreciation) and other reimbursable by the insurance company of damage will depend on the actual downtime. Typically, the insurer sets the franchise (non-refundable portion of the loss). In this case, the minimum break in the action. Only after the end of a simple subject to an accident.
In addition to all of the above insurance companies offer to their clients and other services. For example, packages that can include medical insurance personnel (both from an industrial accident, and in general), cars (CTP, theft and other risks), insurance products and transportation equipment, etc. There are also packages relevant to employers: liability insurance for a business. The insured event is recognized as causing harm to third parties in the implementation of the insured business, use of leased facilities, maintenance facilities, leased, providing services to the population mass.
Despite the diversity of small business insurance market is practically not covered. Today, these services offer only a stable operating insurance companies. This is because insurers have a number of unavoidable cost of evaluation as insured property and the risks to which it may be subjected. And this despite the fact that the amount of premiums received by small firms are very small.
Do you have your own business? Do you want to sleep? Who does not want to. Let's think about what we do not have enough to do so.
You are making every effort to protect against various negative factors surrounding your business? You need to improve the financial stability of your business and become more attractive to partners? Do you want to increase the amount of working capital and a loan in the bank, but the bank requests the guarantee safeguarding of assets? All these problems can be solved through the insurance of their business. If you are looking for answers to the above questions, then this material will be useful for you! Most private beauty salons, notaries, audit companies, small hospitals are small businesses, which employ a small staff. But people are people. And the "human factor" no one has canceled. Price errors can be very high: God forbid would suffer serious harm to human health or the client's documents vkradetsya inaccuracy. Life is life, and therefore a mistake, even a top expert can not be excluded.
Insurance can not prevent the onset of this "insurance" case, but allows you to greatly offset the potential damage that will be caused to a particular company or business in general negligent actions of perpetrators or third parties. And insuring his liability to customers. can be avoided not only a long litigation, but also to solve a complex problem - not only to preserve the good name, but also a client.
The experience of developed countries shows that, without proper evaluation and organization of insurance risks can not effectively operate any enterprise. Some countries even impose compulsory insurance of liability of legal persons for any damage. Unfortunately, the insurance firm in Russia was not included in the customs of business turnover. It is hoped that businessmen second and third generations will realize that it is better to pay a lesser amount for an insurance policy than to lose business because of one serious injury.
Today, small and medium-sized businesses are constantly on the brink of risk. Organize a company - is simple enough. But to keep the business "afloat" can not much. After all, even with a stable sales of all you can lose in one day. Fires, accidents and fire key employees - all of this poses a threat not only profit but also its very existence. However, the unpleasant consequences can be minimized. To do this, and there is an institute of insurance business.
For example, a hairdresser's financial district is much less stable than the fashion-largest holding. And the fact that the latter only in trouble for a small company can become a disaster. Since the flooding neighbors "on top" is likely to entail significant repair of the hall. However, the budget of the merchant does not always provide the cost of unplanned repairs. The suspension of activity in this case is inevitable.
What, here, interested business owner - to compensate possible losses. It is important that the insurance amount for which insured the enterprise consistent with possible losses when the insured event, as payment for an occurrence is often the only source for an entrepreneur to cover the damage.
The second point, which plays an important role - the size of the premium. Generally, all funds by small and medium businesses are investing in the business. Often, in the event of force majeure, they do not even have the reserves to mitigate its consequences. But despite this, few entrepreneurs decided to spend the money on insurance, but insurance costs are only one percent of the amount of possible losses. For reasons of economy, as well as following the old Russian tradition, small businesses still prefer to rely on "maybe".
Today, insurance companies (insurers) include small business insurance package the following types of insurance:
- Property Insurance - allows you to insure property risks associated with the operation and use: office space, equipment, furniture and goods in warehouses, etc. And also in case of theft, damage or other adverse effects. In the insurance case, the insurance company will compensate the victim company (Insured) damages in full, provided that the sum insured corresponds to the actual value of the insured property. In the case of "nedostrahovaniya" property insurer (by law) shall be entitled to pay only a fraction of the damage, equal to the ratio of the sum insured to the actual value of the property;
- Liability insurance - allows you to insure the Insured's liability for damage to third parties (eg customers), upon presentation of their claims against the company. For example, a master barber messed up hair, the client (painted a different color or retain moisture.) Or the provision of spa services, under the influence of chemically active substances (prof.kosmetika) damaged the health of the client, etc. In this case, the victim may make a complaint to the company or its owner. And what do the latter, if he does not have available funds for redress? This is where the rescue contract professional liability insurance. It should be noted that the insurance company will fulfill the requirement for damages only to the extent of the sum insured.
- Insurance against business interruption - allows you to insure losses arising from unplanned interruptions in production. Often a business small business is concentrated in one place (usually a rental office). In case of fire in the office of the company's activity will be effectively paralyzed. Enforced absence from the company will incur a loss: loss of profit, additional costs in order to reduce damage; unavoidable operating costs (staff salaries, rent, taxes, depreciation) and other reimbursable by the insurance company of damage will depend on the actual downtime. Typically, the insurer sets the franchise (non-refundable portion of the loss). In this case, the minimum break in the action. Only after the end of a simple subject to an accident.
In addition to all of the above insurance companies offer to their clients and other services. For example, packages that can include medical insurance personnel (both from an industrial accident, and in general), cars (CTP, theft and other risks), insurance products and transportation equipment, etc. There are also packages relevant to employers: liability insurance for a business. The insured event is recognized as causing harm to third parties in the implementation of the insured business, use of leased facilities, maintenance facilities, leased, providing services to the population mass.
Despite the diversity of small business insurance market is practically not covered. Today, these services offer only a stable operating insurance companies. This is because insurers have a number of unavoidable cost of evaluation as insured property and the risks to which it may be subjected. And this despite the fact that the amount of premiums received by small firms are very small.
Your Business: Retail Insurance
Insurance Shop - is the most promising and advanced model in the retail insurance business. Here, insurance products are sold as well as at the supermarket, in the neighborhood. According to the experts in this market, all the prospects of this model is yet to come, so the forward-looking entrepreneurs operate in the future.
It's no secret - the insurance market in Russia is at an early stage of development. Insurance culture among the population is poorly developed, and constitute the bulk of the contracts of insurance of cars. While brokers sold no more than 5-10% of policyholders.
Meanwhile, the classical model of the insurance business adopted in the West, involves just a narrow specialization, in which insurance companies only create and bringing to market its own products, while caring for their implementation take on the insurance brokers. In itoge approximately 80% of premiums in the U.S. and Europe gathered this broker, while the remaining 20% comes from insurance companies, agents and direct sales in the offices of insurance companies.
Depending on the amount of funds that the agency or brokerage firm brings the insurer, he may, for example, increase the percentage of commissions or sell the policy at face value. And that satisfies both parties. The average cost of implementing the policy for the insurance company is not less than 30% of its price, while the brokerage does not exceed 25%. "That's why major insurance companies, such as" Ingosstrakh "," ROSNO "," Interros-Accord " "RESO-Guarantee" reluctant to work with brokers.
nsurance stores operate under the same conditions as regular insurance agents, that is, policies are at the same prices. And reduce the cost to customers only through its own reward. But the rate of stores still do not on price but on a wide range of proposals and professional consultations, which allow customers to select the most appropriate insurance for him.
Often, to insure, for example, a car, people would study the proposals of several dozens of companies to find the right quality and price of an option. Insurance stores offer customers products in one place the best-known, respected and trusted insurance companies, but are not limited to two or three, as do ordinary insurance agents, and collecting at least 10-15 sentences. At the same time, stores are not interested in selling insurance only to "their" companies, in contrast to agents who try to "vparit" insurance customer is the company that gives him a large commission. Although by law the commission is limited to a ceiling of ten percent. But there are insurance companies (and all market players know their names!), Which offer twice, three times. That's just the quality of services it provides to policyholders, so it is doubtful that serious partners prefer not to do business with this company and do not recommend it to their customers.
In the insurance market, sales of retail competition in almost not felt. That's why there peacefully get a variety of formats of trade. "Input Level" - it is ordinary citizens who earn by selling insurance to the families and loved ones, neighbors on the porch, and colleagues. Their income is on average $ 200-300 per month.
As for the sale of insurance policies as the main activity, the income there can be up to 3000 dollars. But ... just in a "pyramid" system of multi-level marketing, where agents are paid to managers at every stage of their progress. The average salary of such an agent today, less than 1000 dollars a month.
The next step in this business - selling insurance in mobile locations, "mobile shops". This method is actively used as a "private entrepreneurs", and some major insurers. Typically, these outlets are located at the offices of SAI, at the car and near the car dealerships - where there is a large concentration of people, to some extent related to the road. However, the most corn in the market place has long been divided between old-timers. So the newcomer will be hard to take its "place in the sun."
Some companies are trying to arrange insurance retail on the premises covered bus stops. Rent a "national office" does not come cheap - in Moscow, the amount of payments can reach thousands of dollars per month. Just want to enter into a contract of insurance in such a place a little frivolous. After all, determines the choice of insurers and contingent. As for the stops, and there detained for long periods only those citizens who use public transportation exclusively. Given the fact that the majority of insurance - car, it becomes apparent clearly a bad choice of a place of trade.
However, rumors of a fake city-states, which were spread on the market crooks forced citizens to be wary of all movable points and buy policies only stationary point of sale. It is not easy work, and agents, traveling to clients at home, because people are reluctant to open the door to unknown persons.
It was then drawn and the competitive advantages of insurance shopping. Permanent headquarters location, the convenience of external respectability and credible client.
Today, in order to create a forward-looking company - an insurance broker, you need approximately $ 1.5 million. These will be used to organize a distribution network covering the losses from the work in the first 8-9 months. The distribution network is quite complex. On the one hand - this office, which brings corporate clients and working lawyers, insurance experts that make up individual programs, etc. Then there are insurance shopping - a special office in which agents offer standard packages from different companies. And finally, special "points" - such as car dealerships.
A significant item of expenditure is staff salaries. In contrast, Agent brokerage specialists often receive a small salary and a percentage of sales. Insurance agents, by contrast, typically receive a very small salary, and a solid interest - an average of 15-20% of the premium.
In this paper an insurance broker has its own nuances, to know that a beginner is necessary.
First, in working with insurers oral, informal agreements to fix better on paper because in the event of a dispute the words to deeds, as they say, prishesh!
Secondly, we should not strive for large areas and a separate area. Better to let your office is small, but will "pass on" the greatest public place. At the "gold patch" the best place nice rack, a few chairs, surround it with light designs. Such equipment will not be expensive, especially if you mount it yourself.
Third, you need to plan a long time, until at least 9pm. After all, most of the customers comes after 17 hours, at the end of the day. With the amount of work on this point is quite a person to cope, so hire extra staff is inappropriate. The salary of the employee, usually made up of the commission for each concluded contract.
According to insurers, it is appropriate to deal with large clients, legal persons who realize that they pay for, can assess the level of services provided. Brokers and partners of large companies can significantly bring down the price of an insurance product for a major client. The fact that they can buy insurance from the company at par, and the insurance premium as you see fit.
As individuals, they by and large do not care where the couple and who has to buy insurance, because the price is not reflected. But the insurance companies make concessions to a good customer who buy more than one product, to maintain friendly relations with him, mainly also due to his reward. After all, the main task of an insurance broker at the initial stage - no profit, and increasing customer base.
In general insurance, private individuals - a very promising market, but until he brings a good and stable profits. A win at the major players in the corporate sector is simply unrealistic.
Although, if the market development will occur along the west path, then the prospects for brokering the most optimistic.
It's no secret - the insurance market in Russia is at an early stage of development. Insurance culture among the population is poorly developed, and constitute the bulk of the contracts of insurance of cars. While brokers sold no more than 5-10% of policyholders.
Meanwhile, the classical model of the insurance business adopted in the West, involves just a narrow specialization, in which insurance companies only create and bringing to market its own products, while caring for their implementation take on the insurance brokers. In itoge approximately 80% of premiums in the U.S. and Europe gathered this broker, while the remaining 20% comes from insurance companies, agents and direct sales in the offices of insurance companies.
Depending on the amount of funds that the agency or brokerage firm brings the insurer, he may, for example, increase the percentage of commissions or sell the policy at face value. And that satisfies both parties. The average cost of implementing the policy for the insurance company is not less than 30% of its price, while the brokerage does not exceed 25%. "That's why major insurance companies, such as" Ingosstrakh "," ROSNO "," Interros-Accord " "RESO-Guarantee" reluctant to work with brokers.
nsurance stores operate under the same conditions as regular insurance agents, that is, policies are at the same prices. And reduce the cost to customers only through its own reward. But the rate of stores still do not on price but on a wide range of proposals and professional consultations, which allow customers to select the most appropriate insurance for him.
Often, to insure, for example, a car, people would study the proposals of several dozens of companies to find the right quality and price of an option. Insurance stores offer customers products in one place the best-known, respected and trusted insurance companies, but are not limited to two or three, as do ordinary insurance agents, and collecting at least 10-15 sentences. At the same time, stores are not interested in selling insurance only to "their" companies, in contrast to agents who try to "vparit" insurance customer is the company that gives him a large commission. Although by law the commission is limited to a ceiling of ten percent. But there are insurance companies (and all market players know their names!), Which offer twice, three times. That's just the quality of services it provides to policyholders, so it is doubtful that serious partners prefer not to do business with this company and do not recommend it to their customers.
In the insurance market, sales of retail competition in almost not felt. That's why there peacefully get a variety of formats of trade. "Input Level" - it is ordinary citizens who earn by selling insurance to the families and loved ones, neighbors on the porch, and colleagues. Their income is on average $ 200-300 per month.
As for the sale of insurance policies as the main activity, the income there can be up to 3000 dollars. But ... just in a "pyramid" system of multi-level marketing, where agents are paid to managers at every stage of their progress. The average salary of such an agent today, less than 1000 dollars a month.
The next step in this business - selling insurance in mobile locations, "mobile shops". This method is actively used as a "private entrepreneurs", and some major insurers. Typically, these outlets are located at the offices of SAI, at the car and near the car dealerships - where there is a large concentration of people, to some extent related to the road. However, the most corn in the market place has long been divided between old-timers. So the newcomer will be hard to take its "place in the sun."
Some companies are trying to arrange insurance retail on the premises covered bus stops. Rent a "national office" does not come cheap - in Moscow, the amount of payments can reach thousands of dollars per month. Just want to enter into a contract of insurance in such a place a little frivolous. After all, determines the choice of insurers and contingent. As for the stops, and there detained for long periods only those citizens who use public transportation exclusively. Given the fact that the majority of insurance - car, it becomes apparent clearly a bad choice of a place of trade.
However, rumors of a fake city-states, which were spread on the market crooks forced citizens to be wary of all movable points and buy policies only stationary point of sale. It is not easy work, and agents, traveling to clients at home, because people are reluctant to open the door to unknown persons.
It was then drawn and the competitive advantages of insurance shopping. Permanent headquarters location, the convenience of external respectability and credible client.
Today, in order to create a forward-looking company - an insurance broker, you need approximately $ 1.5 million. These will be used to organize a distribution network covering the losses from the work in the first 8-9 months. The distribution network is quite complex. On the one hand - this office, which brings corporate clients and working lawyers, insurance experts that make up individual programs, etc. Then there are insurance shopping - a special office in which agents offer standard packages from different companies. And finally, special "points" - such as car dealerships.
A significant item of expenditure is staff salaries. In contrast, Agent brokerage specialists often receive a small salary and a percentage of sales. Insurance agents, by contrast, typically receive a very small salary, and a solid interest - an average of 15-20% of the premium.
In this paper an insurance broker has its own nuances, to know that a beginner is necessary.
First, in working with insurers oral, informal agreements to fix better on paper because in the event of a dispute the words to deeds, as they say, prishesh!
Secondly, we should not strive for large areas and a separate area. Better to let your office is small, but will "pass on" the greatest public place. At the "gold patch" the best place nice rack, a few chairs, surround it with light designs. Such equipment will not be expensive, especially if you mount it yourself.
Third, you need to plan a long time, until at least 9pm. After all, most of the customers comes after 17 hours, at the end of the day. With the amount of work on this point is quite a person to cope, so hire extra staff is inappropriate. The salary of the employee, usually made up of the commission for each concluded contract.
According to insurers, it is appropriate to deal with large clients, legal persons who realize that they pay for, can assess the level of services provided. Brokers and partners of large companies can significantly bring down the price of an insurance product for a major client. The fact that they can buy insurance from the company at par, and the insurance premium as you see fit.
As individuals, they by and large do not care where the couple and who has to buy insurance, because the price is not reflected. But the insurance companies make concessions to a good customer who buy more than one product, to maintain friendly relations with him, mainly also due to his reward. After all, the main task of an insurance broker at the initial stage - no profit, and increasing customer base.
In general insurance, private individuals - a very promising market, but until he brings a good and stable profits. A win at the major players in the corporate sector is simply unrealistic.
Although, if the market development will occur along the west path, then the prospects for brokering the most optimistic.
Thursday, June 14, 2012
Two expense profiles
At the joint meeting of the IASB & FASB yesterday (June 13), the boards came to an agreement on the expense recognition patterns for lessee leases to be presented in the Revised Exposure Draft (RED). (My thanks to Asset Finance International for their summary of the board meeting.) If you're looking at the meeting papers prepared by the staff (available here), the choice made was for Approach 3, meaning that some leases will be accounted for using current finance/capital lease accounting (recognizing interest and depreciation expense, with the effect that expenses are higher at the beginning of the lease), while others will be accounted for with a single lease expense item which is recognized straight line over the life of the lease. If the rent payments are equal over the life of the lease, the asset and liability balances will be equal at any date. If they are unequal, the adjustment required to balance cash rent vs. accrual expense (what is shown under current operating lease accounting as a deferred rent liability) will be taken to the asset. The asset will also be adjusted for any initial direct costs or impairments, both of which are to be recognized over the life of the lease (or remaining life, for an impairment).
The second decision was where to draw the line between the two types of expense recognition. The boards opted for Option 3 (as described in agenda paper 3D/237):
(a) Leases of property (defined as land or a building – or part of a building – or both) should be accounted for using a straight-line presentation in the income statement ... unless:
(i) The lease term is for the major part of the economic life of the underlying asset; or
(ii) The present value of fixed lease payments accounts for substantially all of the fair value of the underlying asset.
(b) Leases of assets other than property should be accounted for under Approach 1 [finance accounting] ... unless:
(i) The lease term is an insignificant portion of the economic life of the underlying asset;
(ii) The present value of the fixed lease payments is insignificant relative to the fair value of the underlying asset.
The boards' push for convergence was in evidence in the voting. A solid majority of the IASB preferred a single methodology for all leases, using finance lease accounting. However, members of the FASB very strongly felt that straight line expensing was a necessary part of the standard, and the IASB agreed in the interest of having a common standard.
The implications are that virtually all equipment (except leases of 12 months or less, which have previously been excluded from the standard and will be treated like current operating leases) will use finance accounting, while the vast majority of property leases will use straight line accounting. Only when a property lease is for nearly all of an asset's useful life (or there is an ownership transfer or bargain purchase option) will finance accounting be used. We'll have to see how this sorts out in practice, but this probably means that a lease of a building for less than 30 or 40 years will use straight line unless there are very special circumstances.
At this point, I wouldn't expect an effective date before 2016, to allow companies time to update their systems and gather any needed information. However, the requirement to restate prior years remains, so U.S. companies will generally need to recalculate 2014 & 2015 when they first apply the standard in 2016. If early implementation is permitted, the recalculation period would move forward commensurately. In other words, 2016 isn't that far away.
The second decision was where to draw the line between the two types of expense recognition. The boards opted for Option 3 (as described in agenda paper 3D/237):
(a) Leases of property (defined as land or a building – or part of a building – or both) should be accounted for using a straight-line presentation in the income statement ... unless:
(i) The lease term is for the major part of the economic life of the underlying asset; or
(ii) The present value of fixed lease payments accounts for substantially all of the fair value of the underlying asset.
(b) Leases of assets other than property should be accounted for under Approach 1 [finance accounting] ... unless:
(i) The lease term is an insignificant portion of the economic life of the underlying asset;
(ii) The present value of the fixed lease payments is insignificant relative to the fair value of the underlying asset.
The boards' push for convergence was in evidence in the voting. A solid majority of the IASB preferred a single methodology for all leases, using finance lease accounting. However, members of the FASB very strongly felt that straight line expensing was a necessary part of the standard, and the IASB agreed in the interest of having a common standard.
The implications are that virtually all equipment (except leases of 12 months or less, which have previously been excluded from the standard and will be treated like current operating leases) will use finance accounting, while the vast majority of property leases will use straight line accounting. Only when a property lease is for nearly all of an asset's useful life (or there is an ownership transfer or bargain purchase option) will finance accounting be used. We'll have to see how this sorts out in practice, but this probably means that a lease of a building for less than 30 or 40 years will use straight line unless there are very special circumstances.
Lessor accounting
Having made that decision, the boards discussed the implications for lessors. Since they previously decided that lessors of "investment property" could use operating lease accounting, and this would cover virtually all property lessors, the focus was on equipment lessors. The boards decided that they would use accounting more or less symmetrical with lessee accounting, so the "receivable and residual" model will apply to equipment leases unless the lease has an "insignificant" term or receivable. This is similar to current capital lessor accounting, but with the benefit to lessors that they are permitted to recognize a portion of profit at inception (proportional to the value of the receivable compared to the residual), whereas currently profit is recognized over the life of the lease.Next steps
There will be some wrap-up decisions to make at the July joint boards meeting, related to the RED comment period, transition, and disclosure adjustments. After that, the staff will prepare the RED, with the expectation that it will be released in Q4 2012. (If no further hitches come up, early in the quarter would seem likely.) With an expected 4-month comment period, then time to redeliberate based on comments received, a mid-year 2013 release date of the new standard seems possible, unless there's strong pushback. However, the boards seem to have met the biggest objections, so I think any changes this time around are likely to be modest (tweaks of wording, adjustments of disclosures, etc.), not the wholesale rewrite that we got between the original ED and the RED.At this point, I wouldn't expect an effective date before 2016, to allow companies time to update their systems and gather any needed information. However, the requirement to restate prior years remains, so U.S. companies will generally need to recalculate 2014 & 2015 when they first apply the standard in 2016. If early implementation is permitted, the recalculation period would move forward commensurately. In other words, 2016 isn't that far away.
EZ13
Here at Financial Computer Systems, we're finishing up the latest update of EZ13, which will be released this summer. We won't have the new level expense capital methodology in that version, but will be working on it later this year. We'll have it in place, including transitions from current accounting, long before implementation is required. We do right now provide for pro forma capitalizing operating leases according to current capitalization rules, so you can see what your balance sheet exposure is under the RED.Secrets Of Mineral Makeup
It's an open secret that women love makeup and there is nothing wrong
in it, after all makeup makes one look beautiful. But there are certain
makeup and cosmetics that harm the skin. So even though they may make
you look beautiful but in the long run they are actually damaging your
skin and taking away your natural beauty. Most women don't realize this
until skin problems like red spots, blemishes, rashes and wrinkles at an
early age shows up. The skin on our face has tiny pores and makeup
clogs them. Continuous blockage of these pores slowly destroys the skin
cells and the skin starts losing its natural beauty. So if you like to
wear makeup then make sure you are using the right makeup consisting of
natural ingredients.
One such type of makeup is mineral makeup. It is a cosmetic that contains only natural products; hence it is devoid of any harsh chemicals and gentle on the skin. It does not contain any artificial perfumes, dyes or chemicals. Nowadays many women are turning to natural makeup creams and lotions as they are realizing the harmful effects of using too much chemical based creams and lotions. The term mineral makeup was first coined in 1970 and it was a time when women favored used natural ingredients. Later in 1998 cosmetic companies came to understand the many benefits of natural makeup and it found its way in the mainstream cosmetic industry. It is called mineral cosmetics because all the ingredients are extracted from the earth in form of minerals. Later on these minerals are crushed, sterilized and processed and creams and lotions are made out of them. Mineral cosmetic is nowadays sold in different forms in the market; it is available in the form of foundation, blush, lipstick or eye shadow. This makeup usually is made out of a combination of naturally occurring minerals such as micronized minerals, titanium dioxide and zinc oxide. Traces of iron and clay are also found in this type of makeup. Due to the complete lack of dyes, perfumes and harmful chemicals it does not harm the skin and doesn't cause any inflammation or wrinkles.
Another top reason for the wide acceptance of mineral cosmetics is the look they give. Unlike chemical based makeups, natural mineral based makeup leaves the skin soft and supple and imparts a natural glow. Moreover it is not heavy and feels like you are not wearing any makeup at all. Another big advantage of it is that you don't have to shop according to skin type; mineral based cosmetic is suited for all skin types. It doesn't clog the pores on the skin and allows the skin to breathe.
Mineral Makeup is also easy to apply when compared to other liquid cosmetics. All you need to do is simply apply is to the face and it's done. The clay in the makeup absorbs the oil secreted and leaves a smooth texture on the skin. Nowadays mineral cosmetics are also available with natural SPF to protect your skin from UVB and UVA rays.
One such type of makeup is mineral makeup. It is a cosmetic that contains only natural products; hence it is devoid of any harsh chemicals and gentle on the skin. It does not contain any artificial perfumes, dyes or chemicals. Nowadays many women are turning to natural makeup creams and lotions as they are realizing the harmful effects of using too much chemical based creams and lotions. The term mineral makeup was first coined in 1970 and it was a time when women favored used natural ingredients. Later in 1998 cosmetic companies came to understand the many benefits of natural makeup and it found its way in the mainstream cosmetic industry. It is called mineral cosmetics because all the ingredients are extracted from the earth in form of minerals. Later on these minerals are crushed, sterilized and processed and creams and lotions are made out of them. Mineral cosmetic is nowadays sold in different forms in the market; it is available in the form of foundation, blush, lipstick or eye shadow. This makeup usually is made out of a combination of naturally occurring minerals such as micronized minerals, titanium dioxide and zinc oxide. Traces of iron and clay are also found in this type of makeup. Due to the complete lack of dyes, perfumes and harmful chemicals it does not harm the skin and doesn't cause any inflammation or wrinkles.
Another top reason for the wide acceptance of mineral cosmetics is the look they give. Unlike chemical based makeups, natural mineral based makeup leaves the skin soft and supple and imparts a natural glow. Moreover it is not heavy and feels like you are not wearing any makeup at all. Another big advantage of it is that you don't have to shop according to skin type; mineral based cosmetic is suited for all skin types. It doesn't clog the pores on the skin and allows the skin to breathe.
Mineral Makeup is also easy to apply when compared to other liquid cosmetics. All you need to do is simply apply is to the face and it's done. The clay in the makeup absorbs the oil secreted and leaves a smooth texture on the skin. Nowadays mineral cosmetics are also available with natural SPF to protect your skin from UVB and UVA rays.
Thursday, June 7, 2012
Easy Balance Exercises To Slow The Effects Of Aging On The Brain
Balance Exercises Aid The Brain As It Ages
Older adults can find balance exercises to be very beneficial in a number of ways. Stability exercises are the foundation for moving safely that can aid in keeping the aging brain healthy and sharp. New research out of Scotland refuted the age-old ideas that crossword puzzles and learning a new language are the best ways to diminish cognitive decline in older adults. New outcomes of a study on 700 people born in 1936 show that exercise is absolutely the most beneficial activity to stave off negative cognitive changes during the aging process. In contrast, previous ideas for brain health recommended reading, playing brain stimulating games, or visiting with friends and relatives. The recent study showed that those activities did virtually nothing to enhance brain function in the elderly.
Balance Exercises Lead To Better Brain Health
The Scottish study revealed that exercise leads to better brain health. In general, exercise increases circulation in the body and brain and brings oxygen and nutrients to the brain. One brilliant aspect of this study was to define the exercise level needed to maintain good cognitive health. The researchers broke down exercise levels into a six point scale. The easiest exercise level was described as moving only in connection to household activities. The highest level of exercise involved intense sports activity several times a week. The study was able to delineate the difference between casual, leisure movement activities verses high level, intense activities. Researchers determined that higher level of physical activity resulted in less brain atrophy, less shrinkage and less brain damage. On the other hand, they found no correlation between leisure activities or activities of daily living at home and brain health. As a result, those people who remain physically active at a high level retain good brain health and show limited cognitive decline.
Balance Exercises Build The Foundation For Good Brain Health
Balance exercises are the starting point for better brain health. The study out of Scotland showed that high levels of intense exercise are needed to bring good circulation to the brain, which maximizes cognitive health for older adults. In order to be able to perform high level activities, every individual needs to have a good foundation of balance abilities. For sports activities like tennis, the individual requires stability in side to side movements to make different ground strokes and volleys. For the ever popular sport of skiing, the person needs excellent balance reactions to manage moving boards on slick surfaces-snow, ice and powder.These balance skills can be developed through daily balance exercises. By stabilizing in challenging situations like with a narrow base of support or with dynamic challenges like turning the head side to side while balancing, the person's balance reactions are maximized. One of the best ways to advance balance skills is to practice everyday at home. Research has found that practicing balance routines every day promotes the necessary balance reactions needed to improve balance. Balance exercises cannot be haphazardly performed on a hit and miss basis. The take home message is to practice your stability routines every day.
Older adults can find balance exercises to be very beneficial in a number of ways. Stability exercises are the foundation for moving safely that can aid in keeping the aging brain healthy and sharp. New research out of Scotland refuted the age-old ideas that crossword puzzles and learning a new language are the best ways to diminish cognitive decline in older adults. New outcomes of a study on 700 people born in 1936 show that exercise is absolutely the most beneficial activity to stave off negative cognitive changes during the aging process. In contrast, previous ideas for brain health recommended reading, playing brain stimulating games, or visiting with friends and relatives. The recent study showed that those activities did virtually nothing to enhance brain function in the elderly.
Balance Exercises Lead To Better Brain Health
The Scottish study revealed that exercise leads to better brain health. In general, exercise increases circulation in the body and brain and brings oxygen and nutrients to the brain. One brilliant aspect of this study was to define the exercise level needed to maintain good cognitive health. The researchers broke down exercise levels into a six point scale. The easiest exercise level was described as moving only in connection to household activities. The highest level of exercise involved intense sports activity several times a week. The study was able to delineate the difference between casual, leisure movement activities verses high level, intense activities. Researchers determined that higher level of physical activity resulted in less brain atrophy, less shrinkage and less brain damage. On the other hand, they found no correlation between leisure activities or activities of daily living at home and brain health. As a result, those people who remain physically active at a high level retain good brain health and show limited cognitive decline.
Balance Exercises Build The Foundation For Good Brain Health
Balance exercises are the starting point for better brain health. The study out of Scotland showed that high levels of intense exercise are needed to bring good circulation to the brain, which maximizes cognitive health for older adults. In order to be able to perform high level activities, every individual needs to have a good foundation of balance abilities. For sports activities like tennis, the individual requires stability in side to side movements to make different ground strokes and volleys. For the ever popular sport of skiing, the person needs excellent balance reactions to manage moving boards on slick surfaces-snow, ice and powder.These balance skills can be developed through daily balance exercises. By stabilizing in challenging situations like with a narrow base of support or with dynamic challenges like turning the head side to side while balancing, the person's balance reactions are maximized. One of the best ways to advance balance skills is to practice everyday at home. Research has found that practicing balance routines every day promotes the necessary balance reactions needed to improve balance. Balance exercises cannot be haphazardly performed on a hit and miss basis. The take home message is to practice your stability routines every day.
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"We need to be ready to make a decision"
The FASB & IASB had separate "education sessions" on June 6, to review the materials the staffs have prepared for next week's joint meeting regarding the new lease accounting standard (and other projects). The FASB session is available here; the discussion on leases starts at about 1 hour, 30 minutes in from the beginning. You can view the IASB session by clicking on the "Register" link on this page. The discussion won't make a lot of sense without having the agenda papers available to look at; those are available here (right-click to download the zip file).
The staffs have, as directed by the boards last month, prepared three possible approaches for expense recognition:
If Approach 3 is desired, then the boards need to decide where to "draw the line" to determine which leases get which treatment. Four options were presented:
Option 4 seemed to have the least support; while it seemed superficially to allow preparers to account for their actual intentions, there was substantial concern of gaming the system and a lack of comparability between different companies. Options 2 & 3 were seen as effectively the same, simply stated differently; Option 2 might be seen as more principles-based, while Option 3 is perhaps easier to put into practice. Some thought that Option 1 would be the simplest to apply, since everyone is familiar with the concept already; however, that would result in most aircraft leases getting straight-line rather than finance accounting, which was troubling. (Aircraft operating lease accounting is a poster child for the need for a new lease accounting standard.)
One board member indicated that he thought in-substance purchases were scoped out of the new lease standard. That's news to me; it had been discussed at one point, but I thought that was long since discarded. I don't see any support for that in the FASB's summary of tentative decisions to date.
During the outreach, most users of financial statements (i.e., financial analysts and investors) expressed a preference for a single approach to lessee accounting, but generally the more important issue to them was getting everything on the balance sheet. It was felt that proper disclosure could enable users who prefer to see leases a different way to make the adjustments they need.
There was some discussion regarding the implications for lessor accounting. Some board members consider symmetry important. Others consider the different business models and purposes on the two sides of the transactions sufficient that symmetry doesn't matter; at least one suggested that no change at all to lessor accounting from current practice is necessary.
The boards are concerned that their decision not seem arbitrary, recognizing that some people will be unhappy with whatever decision they make. They want to be able to defend it on a theoretical, not just practical, basis.
At the end of the session, a FASB board member asked the staff for what preferences had been expressed at the IASB education session held earlier in the day. It was reported that a majority of the IASB seems to have a first preference for Approach 1, but also that the strength of preference for that over Approach 3 would depend on where a line was to be drawn. So we have a difference of opinion between the boards; we know that they want very strongly to release a unified standard, so we'll have to see how that gets resolved.
To wrap up, though, the comment was, "We need to be ready to make a decision." The staff said a similar sentiment was expressed by the IASB. They've scheduled 5-1/2 hours of discussion for Wednesday & Thursday, June 13 & 14.
The staff expects this meeting to include the last substantive decisions on the new standard to be presented in the revised exposure draft (RED). They plan to follow up in July with wrap-up decisions, such as the comment period for the RED and interim disclosures, plus any decisions that may need to follow on from June decisions (such as adjusting disclosures if the approach to lessee accounting changes). After that, they would be ready to draft the RED and release it later in the year. The FASB Current Technical Plan is now reporting that the RED is expected to be released in Q4 2012 (that's a recent development; just a few weeks ago, it was simply "second half of 2012").
The staffs have, as directed by the boards last month, prepared three possible approaches for expense recognition:
- The current plan: All leases are treated using current finance lease accounting.
- What was called "Approach D" last month: level expense recognition, with the asset and liability linked throughout the life of the lease (if rent payments are equal throughout the lease life, asset and liability will be equal at all times).
- A combination of the two approaches, with the necessity to decide which leases need which treatment.
If Approach 3 is desired, then the boards need to decide where to "draw the line" to determine which leases get which treatment. Four options were presented:
- Finance lease accounting when the lease transfers substantially all the risks and rewards of ownership (the language used currently in IAS 17, which is also the concept behind FAS 13; the determination, however, would be made using IAS 17 principles, rather than FAS 13's "bright lines" of 75% and 90%).
- Finance lease accounting when the ROU asset represents the acquisition of a more than insignificant portion of the underlying asset.
- Determination based on the nature of the underlying asset:
- Property leases would use Approach 2 (straight line) unless the lease term is for the major part of the economic life of the underlying asset or the present value of the rent accounts for substantially all of the asset's fair value;
- Equipment leases would use Approach 1 (financing) unless the lease term is an insignificant portion of the economic life of the underlying asset or the present value of the rents is insignificant relative to the asset's fair value.
- Determination based on the lessee’s business purpose for entering into the lease arrangement.
Option 4 seemed to have the least support; while it seemed superficially to allow preparers to account for their actual intentions, there was substantial concern of gaming the system and a lack of comparability between different companies. Options 2 & 3 were seen as effectively the same, simply stated differently; Option 2 might be seen as more principles-based, while Option 3 is perhaps easier to put into practice. Some thought that Option 1 would be the simplest to apply, since everyone is familiar with the concept already; however, that would result in most aircraft leases getting straight-line rather than finance accounting, which was troubling. (Aircraft operating lease accounting is a poster child for the need for a new lease accounting standard.)
One board member indicated that he thought in-substance purchases were scoped out of the new lease standard. That's news to me; it had been discussed at one point, but I thought that was long since discarded. I don't see any support for that in the FASB's summary of tentative decisions to date.
During the outreach, most users of financial statements (i.e., financial analysts and investors) expressed a preference for a single approach to lessee accounting, but generally the more important issue to them was getting everything on the balance sheet. It was felt that proper disclosure could enable users who prefer to see leases a different way to make the adjustments they need.
There was some discussion regarding the implications for lessor accounting. Some board members consider symmetry important. Others consider the different business models and purposes on the two sides of the transactions sufficient that symmetry doesn't matter; at least one suggested that no change at all to lessor accounting from current practice is necessary.
The boards are concerned that their decision not seem arbitrary, recognizing that some people will be unhappy with whatever decision they make. They want to be able to defend it on a theoretical, not just practical, basis.
At the end of the session, a FASB board member asked the staff for what preferences had been expressed at the IASB education session held earlier in the day. It was reported that a majority of the IASB seems to have a first preference for Approach 1, but also that the strength of preference for that over Approach 3 would depend on where a line was to be drawn. So we have a difference of opinion between the boards; we know that they want very strongly to release a unified standard, so we'll have to see how that gets resolved.
To wrap up, though, the comment was, "We need to be ready to make a decision." The staff said a similar sentiment was expressed by the IASB. They've scheduled 5-1/2 hours of discussion for Wednesday & Thursday, June 13 & 14.
The staff expects this meeting to include the last substantive decisions on the new standard to be presented in the revised exposure draft (RED). They plan to follow up in July with wrap-up decisions, such as the comment period for the RED and interim disclosures, plus any decisions that may need to follow on from June decisions (such as adjusting disclosures if the approach to lessee accounting changes). After that, they would be ready to draft the RED and release it later in the year. The FASB Current Technical Plan is now reporting that the RED is expected to be released in Q4 2012 (that's a recent development; just a few weeks ago, it was simply "second half of 2012").
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