The Great-West Life Assurance Company, along with subsidiaries London Life and Canada Life, is a leading insurer

Question:

The Great-West Life Assurance Company, along with subsidiaries London Life and Canada Life, is a leading insurer in Canada, providing financial security services to Canadians. Access the 2017 annual report for The Great-West Life Assurance Company from the company’s website.

Instructions

Refer to the consolidated financial statements when answering the following questions.

a. Note 5 (a) of the consolidated fi nancial statements provides detailed information about the carrying values and estimated values of the company’s investments in 2017 and 2016. What does “carrying value” mean? Why are the amounts listed under carrying value sometimes different from the amounts listed under fair value? Which investments are reported on the consolidated balance sheet at fair value and which are reported at amortized cost? “Availablefor- sale” is another term for FVTOCI investments and “loans and receivables” is another term for amortized cost investments.

b. Note 5 (a) includes amounts for stock, equity method. What type of investment does this represent?

c. Refer to the endnotes for Note 5 (a). When does the company designate an investment (financial asset) as fair value through profit or loss? Indicate why some of the reported stocks are listed as “available-for-sale, at cost” when an available-for-sale investment is normally measured at fair value.

d. Refer to Note 5 (e), which details net investment income. Net investment income is $5,616. How much of this amount arose from fair value adjustments?

e. Refer to Note 2, Fair Value Measurement. What methodologies are used to determine the fair value of bonds and stocks at fair value through profit or loss and available-for-sale?

f. Refer to the consolidated statements of comprehensive income. Were there any holding gains or losses (unrealized) reported on FVTOCI investments (the company refers to these investments as available-for-sale assets) during the year? What is a realized gain or loss?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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