Accounting for the Purchase of Life Settlement Contracts

By Alan Reinstein and Cathleen L. Miller

SEPTEMBER 2007 - Purchasing life insurance policies from the elderly or terminally ill is becoming an increasingly popular investment tool (see Charles Duhigg, “Late in Life, Finding a Bonanza in Life Insurance,” New York Times, December 17, 2006). These policies are often called speculator-initiated life insurance (spin-life) policies, life settlement contracts, or viaticals. In response to the growth in these investments, FASB issued new authoritative guidance relevant to accountants, financial planners, investors, and insurance professionals.

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Publisher's Column

Rethinking College Savings Strategies

With rapidly increasing college costs, the need for a carefully developed college savings strategy has never been greater. According to the College Board, the average annual cost of a four-year public college exceeds $12,000 and that of a four-year private college is approaching $30,000. In many cases, advance planning and the use of tax-favored savings vehicles can minimize the need for borrowing in order to fund college costs. Full Story

Protecting the Tax Dollar

In auditing and attestation, the phrase “expectation gap” is often used to describe the difference between what CPAs do and what the public thinks CPAs do, especially regarding fraud. Members of the public generally believe that a CPA’s job is to ensure that financial statements are 100% accurate. Members of the profession, however, generally see the CPA’s job as providing reasonable assurance that financial statements are accurate by adhering to professional standards.
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Does Financial Literacy Contribute to Happiness?

he AICPA’s 360 Degrees of Financial Literacy educational program, begun in May 2004, partners with state CPA societies to help people of all ages better manage their finances ( The importance of improving financial literacy is underscored by the results of a recent study funded by the AICPA (
SavingsReport10_16.pdf). Full Story

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