Discuss AHIP AHM-520 Exam Topic 5 Question 9

All publicly traded health plans in the United States are required to prepare financial statements for use by their external users in accordance with generally accepted accounting principles (GAAP). In addition, health insurers and health plans that fall under the jurisdiction of state insurance departments are required by law to prepare certain financial statements in accordance with statutory accounting practices (SAP). In a comparison of GAAP to SAP, it is correct to say that:

AGAAP is established and promoted by the National Association of Insurance Commissioners (NAIC), whereas SAP is established and promoted by the Financial Accounting Standards Board (FASB)

BThe going-concern concept is an underlying premise of GAAP, whereas SAP tends to focus on the liquidation value of the MCO or the insurer

CGAAP provides for a single method of valuing all of a health plan's assets, whereas SAP offers the health plan more than one method for valuing its assets

DThe principle of conservatism is fundamental to GAAP, whereas SAP generally is not conservative in nature

Suggested Answer: B

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12 comments · newest first

Pearly 11 months ago

Really? I thought both were pretty similar in practice.

Eugene 12 months ago

GAAP has one asset valuation method, SAP has multiple.

Carolann 12 months ago

Wait, isn’t SAP supposed to be more conservative?

Lashon 1 year ago

Totally agree, GAAP is more about ongoing operations.

Lazaro 1 year ago

GAAP is from FASB, SAP is from NAIC.

Raina 1 year ago

I vaguely remember that the NAIC deals with SAP, not GAAP, which is set by FASB. So, I think option A is definitely incorrect, but I need to double-check my notes.

Lisbeth 1 year ago

I practiced a question similar to this, and I think the principle of conservatism is more emphasized in GAAP. So, option D could be the right choice, but I'm not entirely sure.

Carline 1 year ago

I’m a bit confused about the differences in asset valuation methods. I thought GAAP had more flexibility, but I can't recall if SAP offers multiple methods.

Janna 1 year ago

I remember that GAAP is more focused on the ongoing operations of a business, while SAP looks at the financial health from a liquidation perspective. So, I think option B might be correct.

Francoise 1 year ago

Okay, let me consider the options here. I think I'll start by researching the bfg tool, since that seems like the most likely solution based on the question.

Sarah 1 year ago

I'm a bit confused by this question. Does the Data Confidentiality pattern always require encryption, or are there exceptions? I'll need to review my notes to be sure.

Weldon 1 year ago

I'm confident I can solve this. The correct answer is option B - restore the server pool from the Oracle VM Manager.

AHIP AHM-520 Exam - Topic 5 Question 9 Discussion