Document ID: chunk:federal_register_of_legislation:F2023L00717:body:0:p12
Version: federal_register_of_legislation:F2023L00717
Segment Type: other
Provision Reference: 
Character Range: 44080–47740

VSA decreases if a payable balance is recognised or cash is paid directly without recognising a payable balance.                                                                                                                                                                                   AASB 17 liabilities decrease if cash is paid. Note that a payable balance would be included in AASB 17 liabilities.

3. Impact of investment, FUM expenses and tax on VSA / AASB 17 liabilities

Item L3.1  Report investment earnings and foreign exchange (FX) – impact on VSA.                                                                              Item A3.1  Report insurance finance income / expense and effects of movements in FX – impact on EFCF (non-PRP portion), RA and CSM.

           This is actual investment earnings (includes realised and unrealised gains and losses) and FX on assets supporting participating business VSA.                This is actual investment earnings (includes realised and unrealised gains and losses) and FX on assets supporting participating business (or discount roll-forward of AASB 17 liabilities for non-Variable Fee Approach (VFA) method). This must be reported gross of A3.2 and A3.3 (i.e. FUM expenses and tax).

           This must be reported gross of L3.2 and L3.3 (i.e. FUM expenses and tax).                                                                                     Positive investment earnings / FX gains increase AASB 17 liabilities.

           Positive investment earnings / FX gains increase VSA.

Item L3.2  Report FUM expenses – impact on VSA.                                                                                                               Item A3.2  Report FUM expenses – impact on EFCF (non-PRP portion), RA and CSM.

           This is actual FUM expenses on assets supporting participating business VSA.                                                                                  This is actual FUM expenses on assets supporting participating business.

           FUM expenses would be reflected when setting the discount rate under the VSA led method.                                                                      This applies if FUM expenses are reflected when setting the discount rate under AASB 17. Otherwise, report nil under this item.

           VSA decreases if a payable balance is recognised or cash is paid directly without recognising a payable balance.                                              If FUM expenses are reflected in the discount rate instead of being treated as part of future cash flows, AASB 17 liabilities decrease if a payable balance is recognised or cash is paid directly without recognising a payable balance.
Item L3.3  Report current and deferred tax expense due to L3.1 and L3.2 – impact on VSA.                                                                      Item A3.3  Report current and deferred tax expense due to A3.1 and A3.2 – impact on EFCF (non-PRP portion), RA and CSM.

           This is current and deferred tax expense due to L3.1 and L3.2 (i.e. investment earnings and FUM expenses).                                                    This is current and deferred tax expense due to A3.1 and A3.2 (i.e. investment earnings and FUM expenses).

           Tax due to L3.1 and L3.2 would be reflected when setting the discount rate under the VSA led method.                                                          This applies if tax due to A3.1 and A3.2 are reflected when setting the discount rate under AASB 17. Otherwise, report nil under this item.

           VSA decreases if a tax payable / deferred