Basic Research in Fair Value Measurement of Insurance Contracts

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The purpose of this research is to analyze institutional processes of fair value measurement focusing on insurance contracts. The following results were obtained about accounting for financial instruments and revenue recognition that are closely associated with accounting for insurance contracts. (1) The treatmentsof customer's relationship and changes in credit worthiness are very important issues in considering the fair value measurement of financial liabilities. (2) When the items that there are no active and deep markets such as performance obligations are measured at fair value, there are possibilitiesto decrease the usefulness of information of stock because of model errors and reporting bias errors. These results are applied to the fair value measurement of insurance contracts and offer an important suggestion for analysis of fair value measurement.