![]() SAP – Key Differences from GAAP financial statements and related disclosures The system focuses on measuring the ability of an insurance company to pay claims in the future where the stakeholders are the policyholders themselves or their named beneficiaries. SAP, on the other hand, is designed to present financial information to a very limited audience – regulators. This system focuses on measuring the financial performance of a company over a period of time (month, quarter or year) and is characterized by concepts such as matching expenses to revenue. GAAP is designed to present financial information to a diverse audience with multiple needs. The reality is that each standard is seeking to provide conformity to the presentation of financial information for very different reasons. SAP – A Different PurposeĪ key difference between the accounting principles used in GAAP versus SAP is the objective each is attempting to accomplish. ![]() To help clients, prospects and others understand the main differences between SAP and GAAP, JLK Rosenberger has provided a brief summary below. While there are many similarities between the two, there are also many important differences that need to be understood. While similar to Generally Accepted Accounting Principles (GAAP), SAP provides guidance on how key financial information for an insurance company should be reported. SAP is the insurance industry’s accounting language. The same can be said of learning new accounting principles such as Statutory Accounting Principles (SAP). It takes significant time, practice and sometimes exposure to native speakers to master another language. There are new expressions to learn, grammatical rules to follow, sentence structure guidelines and even diverse pronunciation styles. Learning a foreign language can be difficult. ![]()
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