Orion SA recognises a profitable group of contracts. It received 4,000 of premiums at issue. The present value of expected claims is 2,900 and the risk adjustment for non-financial risk is 300 (case data; acquisition cash flows nil). The contractual service margin is therefore 800 euros: it gives rise to no income at issue. Record the entry for the initial recognition of the group (liability equal to the fulfilment cash flows and the margin).
- Premiums received at issue
- 4,000
- Present value of expected claims
- 2,900
- Risk adjustment for non-financial risk
- 300