M
Mbotha
Member
Minimum profit is calculated similarly to the trading profit formula in ch6. Ch7 core reading says that minimum profit is the accounting profit (including dividends), after a (1) deduction for policyholder bonuses and (2) adjustment for current and deferred tax on policher I-E items. I'm trying to understand the differences between the two:
- Are expenses still the full expenses (no spread of acquisition costs)?
- Ch6 formula defines benefit payments as including terminal bonus. Given (1) above, are terminal bonuses excluded in the minimum profit calculation? What does (1) refer to otherwise?
- What does (2) mean?