Admitted Assets

Sometimes we don’t want to admit to the IRS that we have any assets, but admitted assets refer to those held by an insurance company that are allowed to be included in their official financial statements, such as the balance sheet and income statement.

Being able to prove their company is solvent and has enough reserves on hand to pay out claims is a very big deal in the insurance industry. The assets they can include in the financial statements must be liquid and available to pay claims, such as stocks, cash, mortgages and accounts receivable. These are a crucial part of the calculations used to determine if the company has enough capital to meet the requirements of state insurance regulations. Assets such as an invoice to a customer that you have no hope of ever collecting, or a building that no one would ever want to buy, since it sits on a toxic waste dump, would not be considered admitted assets.