CCIR.Instructions

Question 1

Identify and briefly describe 3 methods for calculating equity

Answer 1

Method 1: Fundamental Accounting Equation
- A(x) = L(x) + E(x)

Method 2: From prior year’s equity and current year’s income
- E(x) = E(x-1) + CI(x)
- CI(x) = NI(x) + OCI(x)

Method 3: Sum the appropriate line items from the Statement of Financial Position - Liabilities & Equity, page 20.11
- E(x) = PHE(x) + SHE(x) + nci(x)

Question 2

Briefly describe 1 complication when calculating equity using Method 2

Answer 2

• Assumes the company did not make certain kinds of capital transactions, like dividends
• If dividends were paid, they must be subtracted from Net Income to calculate Equity

Question 3

Identify the components of SHE (Shareholders’ Equity) from page 20.11 (Hint: CP-CORNA)

Answer 3

• Common Shares
• Preferred Shares
• Contributed Surplus
• Other capital
• Retained Earnings
• Nuclear Reserves
• AOCI (Accumulated Other Comprehensive Income)

Question 4

What is an unrealized gain

Answer 4

An increase in the value of an asset or investment that an investor has not sold

Question 5

Does AOCI include “realized” or “unrealized” gains/losses on OCI

Answer 5

AOCI includes unrealized gains on OCI

Recall:
- AOCI is “Accumulated Other Comprehensive Income”
- OCI is “Other Comprehensive Income”

Question 6

Is AOCI shown on page 20.10 (Statement of Financial Position - Assets)

Answer 6

No

Question 7

Is AOCI shown on page 20.11 (Statement of Financial Position - Liabilities & Equity)

Answer 7

Yes, it’s parth of Shareholders Equity (line 570)

Question 8

Identify the 3 most important pages in the Core Return

Answer 8

20.10: Statement of Financial Position - Assets

20.11: Statement of Financial Position - Liabilities & Equity

20.22: Statement of Profit or Loss

Question 9

On which financial statment page is “Net Income” shown

Answer 9

Statement of Profit of Loss - page 20.22

Question 10

What is the formula for “Net Income”

Answer 10

NI = ISR + NIR + OIE - Taxes + Discontinued Operations

where
- ISR = Insurance Service Result
- NIR = Net Investment Result
- OIE = Other Income & Expenses

Question 11

What is the formula for ISR (Insurance Service Result)?

Answer 11

ISR = TIR + NRE - ISE

where
- TIR = Total Insurance Revenue (TIR)
- NRE = Net Expenses from Reinsurance Contracts Held
- ISE = Insurance Service Expenses