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Recent Accounting Pronouncements
 6 Months Ended
Jun. 30, 2023
Accounting Standards Update and Change in Accounting Principle [Abstract]  
Recent Accounting Pronouncements Recent Accounting Pronouncements
Adoption of New Accounting Standards
Financial Instruments – Credit Losses – Troubled Debt Restructurings and Vintage Disclosures
In March 2022, the Financial Accounting Standards Board (“FASB”) proposed amendments to Accounting Standards Update (“ASU”) 2016-13, Financial Instruments—Credit Losses: Measurement of Credit Losses on Financial Instruments (“Topic 326”). The update removes the recognition and measurement guidance for Troubled Debt Restructurings (“TDRs”) by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, and modifies the disclosure requirements for certain loan refinancing and restructuring by creditors when a borrower is experiencing financial difficulty. Rather than applying the recognition and measurement for TDRs, an entity must apply the loan refinancing and restructuring guidance to determine whether a modification results in a new loan or a continuation of an existing loan. The update also requires entities to disclose current-period gross write-offs
by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. The amendments are to be applied prospectively, but entities may apply a modified retrospective transition for changes to the recognition and measurement of TDRs. For entities that have adopted Topic 326, the amendments are effective for interim and annual periods beginning after December 15, 2022. The Company adopted the standard on January 1, 2023. The adoption of this update did not have a material impact on the Company’s consolidated results of operations and financial condition and modifications to disclosures are immaterial in the current period.
Business Combinations – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
In October 2021, the FASB updated the accounting standards to require an entity (acquirer) to recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606, Revenue for Contracts with Customers (“Topic 606”). At the acquisition date, an acquirer is required to account for the related revenue contracts in accordance with Topic 606 as if it had originated the contracts. Generally, this should result in an acquirer recognizing and measuring the acquired contract assets and contract liabilities consistent with how they were recognized and measured in the acquiree’s financial statements (if the acquiree prepared financial statements in accordance with GAAP). The amendments apply to all contract assets and contract liabilities acquired in a business combination that result from contracts accounted for under the principals of Topic 606. The standard is effective for interim and annual periods beginning after December 15, 2022. The Company adopted the standard on January 1, 2023. The adoption of this update did not have an impact on the Company’s consolidated results of operations and financial condition.
Financial Services – Insurance – Targeted Improvements to the Accounting for Long-Duration Contracts
In August 2018, the FASB updated the accounting standard related to long-duration insurance contracts (ASU 2018-12). The guidance changes elements of the measurement models and disclosure requirements for an insurer’s long-duration insurance contract benefits and acquisition costs by expanding the use of fair value accounting to certain contract benefits, requiring updates, if any, and at least annually, to assumptions used to measure liabilities for future policy benefits, and changing the amortization pattern of deferred acquisition costs to a constant level basis. Adoption of the accounting standard will not impact overall cash flows, insurance subsidiaries’ dividend capacity, or regulatory capital requirements.
When the Company adopted the standard as of January 1, 2021 (the “transition date”), opening equity was adjusted for the adoption impacts to retained earnings and accumulated other comprehensive income (loss) (“AOCI”) and prior periods presented (i.e. 2021 and 2022) were restated. The adoption impact as of January 1, 2021 was a reduction in total equity of $1.9 billion, of which $0.9 billion and $1.0 billion were reflected in retained earnings and AOCI, respectively.
The following table presents the effects of the adoption of the above new accounting standard to the Company’s previously reported Consolidated Balance Sheets:
 As Filed December 31, 2022AdjustmentPost-adoption December 31, 2022As Filed December 31, 2021AdjustmentPost-adoption December 31, 2021
(in millions)
Assets
Market risk benefits$— $1,015 $1,015 $— $539 $539 
Receivables (allowance for credit losses: 2022, $75; 2021, $55)
15,779 (184)15,595 16,205 927 17,132 
Deferred acquisition costs3,160 (383)2,777 2,782 62 2,844 
Other assets9,341 (64)9,277 11,375 297 11,672 
Total assets$158,468 $384 $158,852 $175,910 $1,825 $177,735 
Liabilities and Equity
Liabilities:
Policyholder account balances, future policy benefits and claims$36,067 $(1,935)$34,132 $35,750 $(727)$35,023 
Market risk benefits— 2,118 2,118 — 3,440 3,440 
Other liabilities6,305 11 6,316 8,641 216 8,857 
Total liabilities154,855 194 155,049 169,969 2,929 172,898 
Equity:
Retained earnings19,531 387 19,918 17,525 (203)17,322 
Accumulated other comprehensive income (loss), net of tax(2,349)(197)(2,546)259 (901)(642)
Total equity3,613 190 3,803 5,941 (1,104)4,837 
Total liabilities and equity$158,468 $384 $158,852 $175,910 $1,825 $177,735 
The following tables present the effects of the adoption of the above new accounting standard to the Company’s previously reported Consolidated Statements of Operations:
 
Three Months Ended June 30,
As Filed 2022AdjustmentPost-adoption 2022As Filed 2021AdjustmentPost-adoption 2021
(in millions, except per share amounts)
Revenues
Distribution fees$458 $1 $459 $452 $— $452 
Premiums, policy and contract charges365 (23)342 364 (23)341 
Total revenues3,511 (22)3,489 3,420 (23)3,397 
Total net revenues3,508 (22)3,486 3,418 (23)3,395 
Benefits and expenses
Distribution expenses1,236 3 1,239 1,233 3 1,236 
Benefits, claims, losses and settlement expenses82 (278)(196)404 (136)268 
Remeasurement (gains) losses of future policy benefit reserves— 1 1 — (5)(5)
Change in fair value of market risk benefits— 519 519 — 411 411 
Amortization of deferred acquisition costs152 (85)67 63 2 65 
Total expenses2,553 160 2,713 2,697 275 2,972 
Pretax income955 (182)773 721 (298)423 
Income tax provision199 (40)159 130 (63)67 
Net income$756 $(142)$614 $591 $(235)$356 
Earnings per share
Basic$6.73 $(1.26)$5.47 $4.99 $(1.98)$3.01 
Diluted$6.61 $(1.24)$5.37 $4.88 $(1.94)$2.94 
 
Six Months Ended June 30,
As Filed 2022AdjustmentPost-adoption 2022As Filed 2021AdjustmentPost-adoption 2021
(in millions, except per share amounts)
Revenues
Distribution fees$904 $1 $905 $910 $— $910 
Premiums, policy and contract charges733 (53)680 711 (32)679 
Total revenues7,168 (52)7,116 6,775 (32)6,743 
Total net revenues7,163 (52)7,111 6,768 (32)6,736 
Benefits and expenses
Distribution expenses2,533 6 2,539 2,408 6 2,414 
Benefits, claims, losses and settlement expenses293 (457)(164)1,057 (549)508 
Remeasurement (gains) losses of future policy benefit reserves— (5)(5)— (45)(45)
Change in fair value of market risk benefits— 619 619 — (476)(476)
Amortization of deferred acquisition costs248 (116)132 68 63 131 
Total expenses5,285 47 5,332 5,554 (1,001)4,553 
Pretax income1,878 (99)1,779 1,214 969 2,183 
Income tax provision361 (21)340 186 206 392 
Net income$1,517 $(78)$1,439 $1,028 $763 $1,791 
Earnings per share
Basic$13.42 $(0.69)$12.73 $8.63 $6.41 $15.04 
Diluted$13.16 $(0.68)$12.48 $8.45 $6.27 $14.72 
 
Years Ended December 31,
As Filed 2022AdjustmentPost-adoption 2022As Filed 2021AdjustmentPost-adoption 2021
(in millions, except per share amounts)
Revenues
Distribution fees$1,938 $1 $1,939 $1,830 $(2)$1,828 
Premiums, policy and contract charges1,411 (14)1,397 273 (52)221 
Total revenues14,347 (13)14,334 13,443 (54)13,389 
Total net revenues14,271 (13)14,258 13,431 (54)13,377 
Benefits and expenses
Distribution expenses4,923 12 4,935 5,015 13 5,028 
Benefits, claims, losses and settlement expenses1,372 (1,130)242 716 (872)(156)
Remeasurement (gains) losses of future policy benefit reserves— 1 1 — (52)(52)
Change in fair value of market risk benefits— 311 311 — (113)(113)
Amortization of deferred acquisition costs208 44 252 124 135 259 
Total expenses11,089 (762)10,327 10,081 (889)9,192 
Pretax income3,182 749 3,931 3,350 835 4,185 
Income tax provision623 159 782 590 178 768 
Net income$2,559 $590 $3,149 $2,760 $657 $3,417 
Earnings per share
Basic$22.99 $5.30 $28.29 $23.53 $5.60 $29.13 
Diluted$22.51 $5.19 $27.70 $23.00 $5.48 $28.48 
Leases – Common Control Arrangements
In March 2023, the FASB proposed amendments to ASU 2016-02, Leases (“Topic 842”). The update applicable to all entities requires leasehold improvements associated with common control leases to be amortized over the useful life of the leasehold improvements to the common control group as long as the lessee controls the use of the underlying asset through a lease and to be accounted for as a transfer between entities under common control through an adjustment to equity if, and when, the lessee no longer controls the use of the underlying asset. The amendment is effective for fiscal years beginning after December 15, 2023, including interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been made available for issuance. The Company early adopted the update during the second quarter of 2023 and will apply the amendments prospectively as of the beginning of 2023 to all new and existing leasehold improvements recognized on or after that date with any remaining unamortized balance of existing leasehold improvements amortized over their remaining useful life to the common control group determined at that date. The adoption of this update did not have a material impact on the Company’s consolidated results of operations and financial condition.