The PAA may be used to simplify measuring a group only where, when the group starts, the entity reasonably expects either that the LRC would come out close to what the general model gives, with no material difference, or that no contract in the group has a coverage period (counting services from every premium inside the contract boundary) longer than a year. The first test is not met where the entity expects, at the start, that the fulfilment cash flows bearing on the LRC could vary significantly before a claim arises; such variability tends to rise with embedded derivatives and with longer coverage periods.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.