U-Haul 2004 Annual Report Download - page 72

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AMERCO AND CONSOLIDATED ENTITIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Ì (Continued)
The carrying value of surplus real estate, which is lower than market value, at the balance sheet date was
$1.5 million for 2004 and 2003, and is included in the investments, other.
Receivables
Accounts receivable include trade accounts from self moving and self storage customers and dealers,
insurance premiums and agent balances due, net of commissions payable and amounts due from ceding
re-insurers, less management's estimate of uncollectible accounts.
Notes and mortgage receivables include accrued interest and are reduced by discounts and amounts
considered by management to be uncollectible.
Policy BeneÑts and Losses, Claims and Loss Expenses Payable
Liabilities for life insurance and certain annuity policies are established to meet the estimated future
obligations of policies in force, and are based on mortality and withdrawal assumptions from recognized
actuarial tables which contain margins for adverse deviation.
Liabilities for annuity contracts consist of contract account balances that accrue to the beneÑt of the
policyholders, excluding surrender values. Liabilities for health, disability and other policies represents
estimates of payments to be made on insurance claims for reported losses and estimates of losses incurred, but
not yet reported.
RepWest's liability for reported and unreported losses is based on RepWest's historical and industry
averages. The liability for unpaid loss adjustment expenses is based on historical ratios of loss adjustment
expenses paid to losses paid. Amounts recoverable from reinsurers on unpaid losses are estimated in a manner
consistent with the claim liability associated with the reinsured policy. Adjustments to the liability for unpaid
losses and loss expenses as well as amounts recoverable from reinsurers on unpaid losses are charged or
credited to expense in periods in which they are made.
Revenue Recognition
Rental revenues are recognized over the period that trucks, moving equipment and storage space are
rented. Product sales are recognized at the time that title passes and the customer accepts delivery. Insurance
premiums are recognized over the policy periods. Interest and investment income are recognized as earned.
Advertising
All advertising costs are expensed as incurred. Advertising expense was $32.7 million in 2004,
$39.9 million in 2003 and $37.8 million in 2002.
Deferred Policy Acquisition Costs
Commissions and other costs which Öuctuate with and are primarily related to the production of
insurance premiums are deferred.
For Oxford, costs are amortized in relation to revenue such that costs are realized as a constant
percentage of revenue.
For RepWest, costs are amortized over the related contract period which generally do not exceed one
year.
F-11