The widespread practice of making bonus reserve valuations for publication or internal purposes has brought to light a number of points which do not arise when surplus is being analysed following a net premium valuation. The following notes have been prepared with a view to their elucidation and are based on a slightly different method of treatment of the problem from that usually employed. The revenue account and corresponding valuation account are brought side by side, and it is shown that in the main surplus is the difference between the corresponding items. The surplus is analysed symbolically, and finally the whole operation in symbols is shown to give a complete reconciliation. The symbols which are not defined by their context are explained in Appendix A.

A particular method of analysis has been followed but it is not claimed as the ideal; the individual may choose to vary the method, but so long as correct principles are maintained the surplus will be traced—which is the object sought.