At initial recognition, the LRC equals premiums received, minus acquisition cash flows (unless expensed under 59(a)), plus or minus any amount from derecognising an asset for acquisition cash flows or another asset or liability previously recognised for the group. At each later reporting date it equals the opening balance, plus premiums received, minus acquisition cash flows, plus the amortisation of those cash flows expensed in the period, plus any adjustment for a financing component, minus the revenue recognised for services given in the period (B126), minus any investment component paid out or moved into the LIC. Where the contracts carry a significant financing component, the LRC is adjusted for time value and financial risk using the paragraph 36 discount rates fixed at initial recognition, unless the entity expects, at initial recognition, a gap of a year or less between delivering each part of the service and the date the matching premium falls due.
The graph holds this control, the 0 it maps to, and the evidence behind each claim, over MCP and REST.