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kavya

kavya (Querist)
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16 October 2015 Where do we show consideration for annuities granted in revenue a/c of lic???

Amol S Joglekar

Amol S Joglekar (Expert)
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16 October 2015 Final Accounts – Credit Side Items:

1. Life Assured Fund: The difference between total receipts and total expenditure of a life insurance company is not profit but is a reserve with which the net liability will be compared when ascertained. The name of this reserve is Life Assurance Fund. Life Assurance Fund appears as the first item on the credit side and it is carried forward from the previous year.
2. Premium: It includes the premium received or yet to be received for the relevant year less any premium paid or to be paid on re-insurance plus the bonus in reduction of premium.
3. Considerations for Annuities Granted: Any lumpsum payment received in lieu of granting annuity is called consideration for annuities granted.

Annuity is an annual payment made by an insurance company to any person, in consideration for a lump sum of money received in the beginning. The payment is made by the insurance company as long as one lives.

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