Margin on services


Margin on Services is a financial reporting method developed by the Australian Accounting Standards Board that relates to life insurance companies in Australia and New Zealand.
Under MoS, the value of future surpluses expected to emerge under a life insurance contract is first determined and then spread over the projected life of the policy. The spreading is normally done as a percent of projected claims in each future year, although other measures can be used, such as premium or expenses. It is this approach to spreading which resulted in the method being called "Margin on Services".
Other characteristics of the MoS framework include:
The method is specified in prudential standard LPS 340 issued by the Australian Prudential Regulatory Authority.