What is K-factor (actuarial)?
K-factor (actuarial) is a measurement referring to the ratio of the present value of deferrable expenses with present value (in economic terms) referring to the value of an expected income stream determined as of the valuation date.
Where have you heard about K-factor (actuarial)?
You may have come across this term in conversations, discussions and activities associated with insurance accounting. The measurement is considered to be an important tool in managing allowed deferrals.
What you need to know about K-factor (actuarial).
As mentioned above, this measurement is considered an important tool in insurance accounting and is related to US GAAP (also called GAAP or Generally Accepted Accounting Principles), which is the accounting standard adopted by the U.S. Securities and Exchange Commission (SEC). K-factor has different meanings and uses in other industries; for example, in engineering 'K-factor' refers to a system that classifies crude oil and in marketing, 'K-factor' is used to refer to the customer-based growth rate of apps and websites.