Margin on Services (or MoS) is a financial reporting method developed by the

Australian Accounting Standards Board The Australian Accounting Standards Board (AASB) is an Australian Government agency that develops and maintains financial reporting standards applicable to entities in the private and public sectors of the Australian economy. Also, the AASB cont ...

that relates to

life insurance Life insurance (or life assurance, especially in the Commonwealth of Nations) is a contract between an insurance policy holder and an insurer or assurer, where the insurer promises to pay a designated beneficiary a sum of money upon the dea ...

companies in

Australia Australia, officially the Commonwealth of Australia, is a sovereign country comprising the mainland of the Australian continent, the island of Tasmania, and numerous smaller islands. With an area of , Australia is the largest country by ...

and

New Zealand New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island coun ...

. 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: * realistic projections * policies can be assets * a risk-free discount rate is used (unless there is market risk in the projections) * future surpluses are recalculated at each reporting date, but are not capitalised to/from profit at that date, although loss-recognition events are possible The method is specified in prudential standard LPS 340 issued by the Australian Prudential Regulatory Authority.

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