Reporting All Other Money Market Mutual Funds

Submitted by Cynthia Braman on Wed, 02/01/2017 - 9:53am

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By Your Booke Instructors

Image of ledger and glassesWhether in the Handbook or in the Update seminar, we communicated to you that the new All Other Money Market Mutual Funds category is not considered to be a bond for statutory reporting purposes.

Also, that such funds are to be reported as Short-Term Investments and accounted for as common stocks, meaning that these shares are to be valued at fair value in the financial statements.

We want to clarify that these funds are no longer reported in column 2, Bonds on the Schedule DA Verification Between Years, but rather, in column 4, Other Short-Term Investment Assets.

A more substantial clarification is the completion of the Cash Flow Statement.  Since share prices can fluctuate daily under the new SEC rules, insurers could also have realized gains and losses on trades of these funds.  

Any unrealized gain or loss on these funds at the Balance Sheet date will also need to be captured in the Cash Flow statement since line 19.2 must tie to the Assets page, line 5.  Both realized and unrealized gains and losses should be reflected on line 12.6 of the Cash Flow.  The Annual Statement Instructions did not change in this area but we felt it was important to highlight the guidance this year.

Since any increase (decrease) in cash from an unrealized gain (loss), did not result from a transaction, you may consider noting the unrealized adjustment in the “Supplemental disclosures of cash flow information for non-cash transactions.”  (FYI – there is some diversity of opinion on whether this disclosure is needed among our staff)

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