Survivorship policy, Financial Accounting


The partners may take out a survivorship policy to safeguard against future cashflow problems incase a partner dies or the business is dissolved. E.g. incase a partner dies, then the remaining partners may wish to continue business but they may experience cashflow problems because they have to pay the estate of the deceased partner.

On dissolution, again the partners may not be able to sell off all the assets on time and thus pay off the creditors.

Therefore, under a survivorship policy the insurance will pay the partners the sum assured on the death of a partner or the surrender value when the policy is terminated because the business is being dissolved.

The premiums paid on such a policy may be treated in several ways:

  • As an asset
  • As an expense and an asset


Posted Date: 12/11/2012 6:27:29 AM | Location : United States

Related Discussions:- Survivorship policy, Assignment Help, Ask Question on Survivorship policy, Get Answer, Expert's Help, Survivorship policy Discussions

Write discussion on Survivorship policy
Your posts are moderated
Related Questions
The managers of Merton Medical Clinic are analyzing a proposed project. The project's most likely NPV is $120,000, but, as evidenced by the following NPV distribution, there is con

A company is necessary by law to offer an issue of new equity finance on a pro-rata basis to its existing shareholders. This makes sure that the existing pattern of ownership and c

A Treasury bond that matures in 10 years has a yield of 3%. A 10-year corporate bond has a yield of 9%. Suppose that the liquidity premium on the corporate bond is 0.8%. What is th

#what are the limitations or disadvantages of accounting concept?

RETAINED PROFITS BROUGHT FORWARD If we recall from the consolidated balance sheet, the group-retained profits should be made up of the holding companies retained profit plus the

Maximize Z= 3x1 + 2X2 Subject to the constraints: X1+ X2 = 4 X1 - X2 = 2 X1, X2 = 0

Calculate the present value and determine the npv, Financial Management. Assume today is 3 December 2009. Helen is 30 years old and has a Bachelor of Business. She is currently em

Most firms build and keep inventories in the course of doing business. Manufacturing firms hold raw material, finished goods and spares and work in process in inventories. Financia

SE CTION A QUESTION 1: Below is a trial balance of a manufacturer of boots for the local market. Trial balance as at 31st December 2012 Dr Rs