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IASB to discuss last round of potential amendments to IFRS 17

  • IASB meeting (blue) Image

Mar 05, 2019

In March 2019, the International Accounting Standards Board (the Board) released the agenda papers for their upcoming meeting. The Board will discuss the last 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 staff asks the Board to consider the following recommendations:

Issue identified at the October IASB meeting

Agenda paper with detailed description (link to IASB website)

Staff recommendation

2 — Level of aggregation of insurance contracts Agenda paper 2A
  1. To retain the IFRS 17 requirements on the level of aggregation unchanged
1 — Scope of IFRS 17 Agenda paper 2D
  1. To amend IFRS 17 to exclude from the scope of the standard certain credit card contracts that provide insurance coverage
25 — Transition: Risk mitigation option Agenda paper 2E
  1. To amend the requirements of IFRS 17 to permit an entity to apply the risk mitigation option prospectively from the IFRS 17 transition date
  2. To amend the requirements of IFRS 17 to permit an entity that can apply IFRS 17 retrospectively to a group of insurance contracts with direct participating features to use the fair value transition approach for the group under certain circumstances
1 — Scope of IFRS 17 Agenda paper 2F
  1. To maintain the transition requirements in IFRS 17 for loans that transfer significant insurance risk if an entity elects to apply the requirements in IFRS 17 to a portfolio of such loans
  2. To maintain the transition requirements in IFRS 9 for loans that transfer significant insurance risk if an entity elects to apply the requirements in IFRS 9 to a portfolio of such loans and initially applies IFRS 17 and IFRS 9 at the same time
  3. To amend the transition requirements in IFRS 9 for loans that transfer significant insurance risk if an entity elects to apply the requirements in IFRS 9 to a portfolio of such loans and has applied IFRS 9 before it initially applies IFRS 17
  4. If the Board supports recommendation 3., to amend IFRS 9 to require an entity to apply the transition requirementsin IFRS 9 necessary for applying the proposed amendments
  5. If the Board supports recommendation 3., to permit an entity to newly designate, and to require an entity to revoke its previous designations of, a financial liability under the fair value option at the date the entity first applies the proposed amendments if a new accounting mismatch is created or a previous accounting mismatch no longer exists as a result of applying the proposed amendments
  6. If the Board supports recommendation 3., not to require an entity to restate prior periods to reflect the application of the proposed amendments but to permit an entity to restate prior periods under particular conditions
  7. If the Board supports recommendation 3., to exempt an entity from presenting the quantitative information required by IAS 8.28(f) and to require an entity to disclose specific information in addition to the disclosures that any other IFRS Standard would require
Amendments to disclosure requirements resulting from the Board’s tentative decisions to date Agenda paper 2G
  1. To amend IFRS 17 to require quantitative disclosure of the expected recognition in profit or loss of the contractual service margin remaining at the end of the reporting period and specific disclosure of the approach to assessing the relative weighting of the benefits provided by insurance coverage and investment-related services or investment return service
  2. To amend IFRS 17 to require a reconciliation of the asset created by insurance acquisition cash flows not yet included in the measurement of a group of insurance contracts at the beginning and the end of the reporting period and quantitative disclosure of the expected inclusion of these acquisition cash flows in the measurement of related insurance contracts when the related insurance contracts are recognised
Overall disclosure and transition requirements Agenda paper 2H
  1. To amend IFRS 17 as discussed in Agenda Papers 2E, 2F and 2G and retain all other disclosure and transition requirements in IFRS 17

The staff notes that after its March 2019 meeting, the Board will have considered all 25 topics identified in October 2018. At its April 2019 meeting, the Board plans to consider the package of amendments tentatively decided by the Board as a whole.

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