Which statement is correct regarding salvage and subrogation treatment under SAP versus GAAP?

Which statement is correct regarding salvage and subrogation treatment under SAP versus GAAP?

• A. SAP requires gross reserves; GAAP requires net
• B. SAP requires net reserves; GAAP requires gross
• C. SAP allows reserves to be gross or net of anticipated salvage and subrogation; GAAP requires subtracting anticipated salvage and subrogation
• D. SAP excludes salvage; GAAP ignores salvage

Answer: (C)