The Effects of Applying Accounting Standard 28 on Iranian Insurance Companies Financial Statements

The main issue in this paper is to study the effect of accounting standard 28 on Iranian insurance companies’ financial statements. The questions that are dealt with in this paper are about the effects of this standard on recognizing unpaid premiums, profit, tax and the risk of distributing unreal profits among shareholders. In order to find answers, we used independent auditors’ reports and financial statements of all Iranian insurance companies since 1387 fiscal year. First, by considering independent auditors reports, we became sure that these standards are applied by Iranian insurance companies. Then, by reviewing 1387 fiscal year’s statements (after implementing the standard) and calculating premium reserve, profit and tax by older approach (before implementing standard 28), the requirements were achieved using sufficient statistical approach and tests. Considering obtained results, we find that applying accounting standard 28 is affecting insurance companies’ financial standards.