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IASB decides on further potential amendments to IFRS 17

  • IFRS - IASB Image

Jan 23, 2019

At its meeting on January 23, 2019, the International Accounting Standards Board (the Board) discussed IFRS 17, "Insurance Contracts" and 5 of the 25 concerns regarding the standard that were identified in October 2018 as candidates for potential amendments.

Applying the criteria for evaluating proposed amendments agreed on in October 2018, the Board came to the following conclusions:

Issue identified at the October IASB meeting

Agenda paper with detailed description (link to IASB website)

Staff recommendation

 Board decision

3 — Acquisition cash flows for renewals outside the contract boundary

Agenda paper 2A

To allocate to any anticipated contract renewals part of the insurance acquisition cash flows directly attributable to newly issued contracts and therefore to capitalise them

13/14 support staff recommendation

12 — Reinsurance contracts held: initial recognition when underlying insurance contracts are onerous

Agenda paper 2B, Agenda paper 2C

To recognise immediate gains on (previously or simultaneously entered) reinsurance contracts, if and to the extent that immediate losses on insurance contracts are recognised; require an entity to apply the expanded exception when the entity
measures insurance contracts applying the PAA

14/14 support staff recommendation

8 — Contractual service margin: limited applicability of risk mitigation exception (some aspects already discussed at the December 2018 meeting)

Agenda paper 2D

To expand the scope of the risk mitigation exception for insurance contracts with direct participation features

14/14 support staff recommendation

13 — Reinsurance contracts held: ineligibility for the variable fee approach

7 — Contractual service margin: coverage units in the general model

Agenda paper 2E

To amend IFRS 17 so that in the general model the contractual service margin should be allocated on the basis of coverage units that are determined by considering both insurance coverage and any investment return service

13/14 support staff recommendation 

The staff notes that papers on the remaining topics from the list of issues presented at the October meeting will be presented to the Board in the first quarter of 2019.

Review the press release on the Board's website.

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