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IASB will propose narrow-scope amendment to IFRS 17

  • IFRS - IASB Image

Jun 22, 2021

At its meeting on June 22, 2021, the IASB discussed a possible nar­row-scope amendment to IFRS 17, Insurance Contracts, presented by the staff. The staff has developed an optional clas­si­fi­ca­tion overlay approach that would address one-time clas­si­fi­ca­tion dif­fer­ences that may arise in the com­par­a­tive in­for­ma­tion that insurers will present on initial ap­pli­ca­tion of IFRS 17 and IFRS 9.

This clas­si­fi­ca­tion overlay would:

  • apply to financial assets that are related to insurance contract li­a­bil­i­ties and to which IFRS 9 has not been applied in the com­par­a­tive period(s);
  • allow an entity to classify those financial assets in the com­par­a­tive period(s) in a way that aligns with how the entity expects those assets would be clas­si­fied on initial ap­pli­ca­tion of IFRS 9;
  • apply for com­par­a­tive periods that have been restated for IFRS 17 (that is, from the tran­si­tion date to the date of initial ap­pli­ca­tion of IFRS 17); and
  • apply on an in­stru­ment-by-in­stru­ment basis.

In the dis­cus­sion, all Board members who spoke supported the amendment. When asked to vote, 13 Board members stated that they are satisfied that the Board has complied with the ap­plic­a­ble due process steps and should begin the balloting process to publish an Exposure Draft; 12 Board members agreed with setting a 60-day comment period for the Exposure Draft; and no Board member intends to dissent from the proposals in the Exposure Draft.

The staff expects to publish the Exposure Draft by the end of July and aims at pub­lish­ing a final amendment at the end of the year.

For a detailed summary of this session, please see Deloitte Global's observer notes.

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