How to prepare accounting treatment for partners life insurance
How to prepare accounting treatment for partners life insurance
Abstract
Life assurance policy is very common practice for partnership in international accounting community to avoid cash crunch because compensation for any death or leavings of partner. However, there is little accounting treatment difference between the two situations as far as calculating the amount pay to the retiring partner or the death’s heir. There is, of course, the likelihood that a death will occur during a financial year and require careful apportionment of the accounting period. In this thesis, I will mainly discuss how to prepare accounting treatment to prevent suddenly huge payment from partnership when a partner dies. It is aim to analyze the five accounting treatment methods, popular in international accounting practice, of life assurance policy in partnership. These five methods are accounting for the life insurance policy (1) as drawing, (2) as an expense, (3) as an asset, (4) as an asset at realized value, (5) as method (4) with special fund account to support it. And furthermore to discuss how much the death’s heir is entitled to receive. At the end of this thesis, I will make a comparative analysis about difference accounting treatment affect on the taxation and profit as well. Finally, I will provide my personal opinions on how to introduce these methods into China to solve the same problem about the death or retirement from partnership.
Key words life insurance policy accounting treatment death’s heir
*若需了解更多与协助请咨询↓→[电脑QQ][手机QQ]【数据协助】
