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Tokio Marine Safety Insurance (Thailand) Public Company Limited
Notes to the Financial Statements

Tokio Marine Safety Insurance (Thailand) Public Company Limited
For the year ended 31 December 2023
Notes to the Financial Statements
For the year ended 31 December 2023

7 Critical accounting estimates, assumptions, and judgements

Estimates, assumptions and judgements are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to be reasonable
under the circumstances.

The preparation of financial statements in conformity with generally accepted accounting principles at
times requires management to make subjective judgments and estimates regarding matters that are
inherently uncertain. These judgments and estimates affect reported amounts and disclosures and actual
results could differ from these estimate. Significant judgements and estimates are as follows:

7.1 Fair value of certain financial assets
The fair value of financial instruments that are not traded in an active market is determined using
valuation techniques. The Company uses judgement to select a variety of methods and make
assumptions that are mainly based on market conditions existing at the end of each reporting
period. Details of key assumptions used are included in note 6.

7.2 Impairment of financial assets

The loss allowances for financial assets are based on assumptions about default risk and
expected loss rates. The Company uses judgement in making these assumptions and selecting
the inputs used in the impairment calculation, based on the Company’s past history and existing
market conditions, as well as forward-looking estimates at the end of each reporting period.
7.3 Impairment of premium receivable and amount due from reinsurers

The Company sets an allowance for doubtful accounts and amount due from reinsurers to
reflect impairment of premium due, uncollected receivables and claim recoveries from reinsurer.
The allowance for doubtful accounts and amount due from reinsurers are based on collection
experience and a review of current status of the premium due as at the date of statement of
financial position.
7.4 Reinsurance assets estimation

Reinsurance assets are determined from estimation using the same methods as the estimation
of claims incurred but not yet reported by insured (Note 4.13) and the unearned premium reserve
calculation. The reinsurance assets are assessed at the period end date to ensure that the
amount shown in financial statement reflects the expected amount to be received in the future
by taking into account the credit rating of reinsurance company and the contractual terms of
reinsurance contracts.
7.5 Premises and equipment and intangible assets

Management determines the estimated useful lives and residual values for the premises and
equipment and intangible assets. Management will revise the depreciation charge where useful
lives and residual values are different to previous estimates, or will write off or write down
technically obsolete assets that have been abandoned or sold.

7.6 Employee benefits obligations

Employee benefits obligations are determined by independent actuary. The amount recognised in the
statement of financial position is determined on an estimation basis utilising various assumptions
including the rate of salary inflation and employee turnover. Any change in these assumptions
will impact the estimation for employee benefits. On an annual basis the Company determines
the appropriate assumptions, which represents the provision expected to be required to settle the
employee benefits.

148 | รายงานประจำาปี 2566 | ANNUAL REPORT 2023 31