Method statement

Step 1.   Use the * applicable insurance contracts accounting standard to measure, at the end of the income year, the company's * liability for incurred claims under * general insurance policies, but when doing so disregard any claims handling costs that are neither attached to, nor directly attributable to, a particular claim.

Step 2.   Using that standard, reduce the result from step 1 by so much of that result as the company expects at the end of the income year to recover under a reinsurance contract:

  (a)   within the meaning of that standard; but

  (b)   that is not one to which subsection   148(1) of the Income Tax Assessment Act 1936 (about reinsurance with non - residents) applies.