The financial assets or financial liabilities arising from the deposit component are accounted for under IAS 39. The classification of the deposit component depends on the intention of the insurer or reinsurer, the definitions of the various IAS 39 categories and the underlying contractual requirements of the insurance contract. (Refer to chapter 14 for further discussion of the accounting treatment in terms of IAS 39.) Receipts and payments relating to the deposit component, except those subject to the requirements of IAS 18, are not recognised in the income statement but as assets and liabilities, while receipts and payments relating to the insurance element are generally recognised in the income.
