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Insurance Accounting Alert - IASB meeting (June 2020)
On 25 June 2020, the International Accounting Standards Board (IASB or the Board) issued amendments to IFRS 17 Insurance Contracts
These amendments to IFRS 17 follow from the Exposure Draft (ED) on proposed Amendments to IFRS 17 Insurance Contracts (published on 26 June 2019), and subsequent re-deliberations based on feedback received on the ED from stakeholders. As a result of its re-deliberations, the IASB has made changes to the following main areas of IFRS 17:
- Deferral of the effective date of IFRS 17 and IFRS 9 Financial Instruments (IFRS 9) for insurers by two years
- Scope of the standard
- Expected recovery of insurance acquisition cash flows from insurance contract renewals
- Contractual service margin (CSM) relating to investment activities
- Applicability of the risk mitigation option for contracts with direct participation features
- Reinsurance contracts held - expected recovery of losses on underlying onerous contracts
- Simplified presentation of insurance contracts in the statement of financial position
- Additional transition reliefs
In addition to the above changes, the amendments also include several other (minor) amendments and editorial changes to IFRS 17. The key features of the amendments are set out in this issue of our Insurance Accounting Alert.