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AHIP AHM-520 Exam - Topic 5 Question 9 Discussion

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:
B) The going-concern concept is an underlying premise of GAAP, whereas SAP tends to focus on the liquidation value of the MCO or the insurer
A) GAAP 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)
C) GAAP 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
D) The principle of conservatism is fundamental to GAAP, whereas SAP generally is not conservative in nature

AHIP AHM-520 Exam - Topic 5 Question 9 Discussion

Actual exam question for AHIP's AHM-520 exam
Question #: 9
Topic #: 5
[All AHM-520 Questions]

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:

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Suggested Answer: B

by Lawrence at May 06, 2022, 09:05 PM

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Pearly
7 months ago
Really? I thought both were pretty similar in practice.
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Eugene
7 months ago
GAAP has one asset valuation method, SAP has multiple.
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Carolann
7 months ago
Wait, isn’t SAP supposed to be more conservative?
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Lashon
8 months ago
Totally agree, GAAP is more about ongoing operations.
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Lazaro
8 months ago
GAAP is from FASB, SAP is from NAIC.
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Raina
8 months 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.
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Lisbeth
8 months 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.
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Carline
8 months 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.
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Janna
8 months 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.
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Francoise
9 months 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.
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Sarah
9 months 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.
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Weldon
9 months ago
I'm confident I can solve this. The correct answer is option B - restore the server pool from the Oracle VM Manager.
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