Bangabandhu Sheikh Mujibur Rahman Science &

Technology University,
Gopalganj 8100

Case Analysis on
“Financial Reporting Practices in the Insurance Company in Bangladesh an Evaluation of
the Implementation of IFRS 4, Insurance Contract

Course Title: Case Analysis for Accounting Research

Course Code: AIS 538

Prepared By
“Rainbow” Group Members
MBA, Semester-1st
Session: 2019-2020
Dept. of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science &Technology University
Gopalganj-8100.

Supervised By
Ashik-Uz-Zaman
Assistant Professor,
Dept. of Accounting & Information Systems
Bangabandhu Sheikh Mujibur Rahman & Science & Technology University
Gopalganj-8100.

Date of Submission: 20-12-2021

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 Letter of Submission

December 20, 2021

Ashik-Uz-Zaman
Assistant Professor
Department of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science and Technology University, Gopalganj-8100

Subject: Submission of Case Analysis for Accounting Research on ‘‘Financial Reporting

Practices in the Insurance Company in Bangladesh an Evaluation of the Implementation of IFRS
4, Insurance Contract

Dear Sir,
The purpose of this letter, as stated in the subject is the submission of this Case Analysis for
Accounting Research, on the topic ‘Financial Reporting Practices in the Insurance Company
in Bangladesh an Evaluation of the Implementation of IFRS 4, Insurance Contract, as given
in class as part of the requirement for the completion of the MBA under the course of Case Analysis for
Accounting Research (AIS 538). The case analysis has been completed by the knowledge that we have
gathered from the course and provided resources by you. We have tried our label best to complete this
report meaningfully and correctly, as much as possible.
We think this report has enabled us to gain insight into the core fact of national contemporary
issues. So it becomes as an extremely challenging and interesting experience. Thank you for your
supportive consideration for formulating a distinguished research concept. We are thankful to all
those persons who provided important information and gave such a valuable advice.
Lastly, we would be thankful once again if you please give your judicious advice on effort and
oblige thereby. We have tried my best, certain mistakes and inconveniences may reside and for
this we seek pardon and hope the department will accept my apologies.

Yours obediently,
Rainbow Group Members

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 Letter of Acceptance
It is my pleasure to accept your work for preparing a Case Analysis for Accounting Research on
“Financial Reporting Practices in the Insurance Company in Bangladesh an Evaluation of
the Implementation of IFRS 4, Insurance Contract”. I have gone through the whole paper. I
think the paper is highly informative & relevant. The paper is seemed original to me. I appreciate
you for such a good work.

I wish your every success in life.

With thanks

…………………..
(Ashik-Uz-Zaman)
Assistant Professor
Dept. of Accounting and Information Systems
Bangabandhu Sheikh Mujibur Rahman Science and Technology University,
Gopalganj-8100

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 Dedicated to

To our honorable teacher Ashik-Uz-Zaman, for giving us the helpful and prestigious support,
expecting the best, and patiently teaching me (over and over again) how to write.
&
To our parents, thank for their love, encouragement, and support, and for demonstrating the
value of education, hard work, and persistence.

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 Acknowledgement

First of all, we want to thank the immeasurable grace and profound kindness of Almighty God,
the supreme authority of the universe who bestowed ours the capability of successful completion
of our Case Analysis for Accounting Research fairly.

This report on “Financial Reporting Practices in the Insurance Company in Bangladesh an

Evaluation of the Implementation of IFRS 4, Insurance Contract” has been a challenging yet
interesting project to work on. We are thankful to our course teacher Ashik-Uz-Zaman, our
Academic faculty from Bangabandhu Sheikh Mujibur Rahman Science & Technology
University. He is teaching & guide us this interesting course so easily, that we can understand
properly. It is an important course for Business students. The versatile viewpoint and teaching
style of Ashik-Uz-Zaman is very nice and examples given by his throughout his lecture are very
much realistic. So it helped us to understand the topics of this course easily.

You are not only our teacher, you are our mentor, authority and guide, all rolled into one person.
We will always be grateful to you for your support and kindness.

Lastly, we want to express our profound thanks to our respected teacher, Ashik-Uz-Zaman for
his kind consent and given practical orientation of conducting such an assignment and helping in
preparing the report which will be very helpful and worthy for our future endeavors.

Your Obedient
Rainbow Group Members

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 Abstract
The wave of globalization has touched in every edge of the world and also proceeds in business
world. Business uses accounting standard for preparing financial statements to examine the
purpose of it. Financial globalization proceeds, International Financial Standard are increasingly
becoming important instruments of integration. Meanwhile, International Financial Reporting
Standards (IFRS) provides evidence of accounting quality for economic consequences. IFRS
argues the purpose of financial reporting is essential to reduce information asymmetry between
corporate manager of companies and parties contracting with firm. This has been observed in
development countries whose are leading engine in the world. Different renowned economic
forum and organization reinforced the influence of implementation of IFRS in which they called
global accounting standards by 2011. By the end of 2008, there were over 100 countries that had
adopted IFRS. Among IFRSs, IFRS 4 requires insurance contract to comply with international
accounting standards for financial reporting in order to give improvements to accounting practice
and to understand the salient aspects that are related to insurance company

Keywords: Insurance Sector, International Accounting Standards Board (IASB), International

Financial Reporting Standards (IFRS), financial system of Bangladesh, IFRS 4, Insurance
Contract,.

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 Executive summary
Bangladesh provide different types of insurance policy which helps to develop the industry,
individual, attract foreign investment, contribution to GDP. It’s also to develop the standard of
living. Like other organizations, it fulfills their duties & put their contribution in national income
and make the financial market healthy. Though, insurance industry has significant prospects in
the economy but for some reasons, it has failed to achieve its goal to some extent. Besides, the
huge prospects of the insurance companies while should fully practices of IFRSs for preparing
financial statements. This study makes a critical appraisal of the contemporary insurance
business and examine whether IFRS 4 can contribute towards the monitoring and the progress as
well as making worldwide the insurance business. This work concentrates on the importance of
practices and application of IFRS 4 for insurance business in relating thereto for developing
country- Bangladesh.

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 Table of Contents

PAGE
S. N NAME OF THE CONTENT NO.
Letter of Submission ii
Letter of Acceptance iii
Dedicated to iv
Acknowledgement v
Abstract vi
Executive summary vii
CHAPTER: ONE
1.1 Introduction 01
1.2 Prospects of the study 01
CHAPTER: TWO
2.1 Literature Review 03
2.2 Objective of the study 03
2.3 Rationale of the Study 04
2.4 Methodology 04
2.5 Data Collection 04
2.6 Limitations of the study 05
CHAPTER: THREE
3.1 Brief History of the International Accounting Standards Committee (IASC) 06
3.2 History of International Accounting Standards Board (IASB) 07
3.3 International Financial Reporting Standards (IFRS) 07
3.4 Overview of Bangladesh financial system 08
3.4.1 Insurance Sector 08
3.5 Overview of financial system of Bangladesh 09
3.6 IFRS 4, Insurance Contract 09
CHAPTER: FOUR
4 Analysis and Findings 12
4.1 Amount shown in financial statement arising from insurance contract, IFRS 4, 12
para. 36
4.2 Accounting policy of insurance contract, IFRS 4 para. 37(a) 12
4.3 Accounting policy of insurance contract related assets, liability income and 12
expense, IFRS 4 para. 37 (b)
4.4 Recognition of assets, liability, income, and expense arising from insurance 13
contract IFRS 4, para. 37(c)
4.5 Gain and loses recognized in profit or loss on buying reinsurance, IFRS 4 para. 13
37(d)

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4.6 Amortize gain and loss, arising on buying reinsurance, IFRS 4, para. 37(e) 13
4.7 Amortization, period and amount on buying reinsurance at the end of the 13
period, IFRS 4, para. 37(f)
4.8 Determined assumption that have been used to measure assets and liability 13
arising in insurance contract and reinsurance, IFRS 4, para. 37(g)
4.9 Effect of changes assumption used to measure insurance assets and liability, 14
IFRS 4, para. 37 (h)
4.10 Reconciliation of change in insurance liability, assets, if any, IFRS 4, para. 14
37(i)
4.11 Amount, timing, and uncertainty of future cash flow from insurance contract, 14
IFRS 4, para. 38
4.12 Objective of managing risk arising from insurance contract, IFRS 4, para. 39 14
(a)
4.13 Condition of insurance contract that have material effect of timing, amount and 14
uncertainty, IFRS 4, para. 39(b)
4.14 Information about insurance risk, IFRS 4, para. 39 (c) 14
4.15 Information about interest rate risk, credit risk (IAS 32) required, IFRS 4, para. 15
39(d)
4.16 Information about expose to interest rate or market risk contained in insurance 15
contract, IFRS 4, para. 39(e)
4.17 No need any disclosure information except, IFRS 4, para. 42 15
4.18 Any impracticable information is exist which will be disclosed, IFRS 4, para. 15
43
4.19 Application of IFRS that it is practicable will be disclosed, IFRS 4, para. 44 15
5.1 Recommendation 16
References 17

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