Insurers face double hit from new accounting rules and new taxes
Apr 11, 2022
The federal government made a final decision on how it will implement IFRS 17 for insurance companies in the budget last week. IFRS 17 introduces a contract service margin (CSM) that defers revenue on new business value (NBV) gains related to insurance contract sales.
The government has decided to adopt IFRS 17 for income tax accounting purposes but to make an exemption for the CSM so that tax revenue is not deferred. Again, the total tax revenue does not change. Insurers simply cannot defer tax revenue by applying the CSM under IFRS 17.
Review the article on the Globe and Mail's website.
