IASB supports narrow-scope amendment to IFRS 17
May 27, 2021
At its meeting on May 27, 2021, the IASB discussed the presentation of comparative information on initial application of IFRS 17 and IFRS 9. Insurers raised concerns about an accounting mismatch between financial assets and insurance contract liabilities that could arise from the continued application of IAS 39. The staff suggested the Board could consider adding a specific transition requirement to IFRS 17 to enable insurers to present comparative information on a basis that is consistent with how IFRS 9 would be applied going forward, without unnecessarily disturbing the transition requirements in IFRS 9.
The majority of Board members and all Board members who participated in the discussion agreed that something should be done. When discussing the staff's analysis, they stressed that
- communication about this possible narrow-scope amendment is very important,
- they had been aware of the problem, but not of its magnitude,
- evidence provided by the insurers has become much more well-founded because implementation is progressing,
- the amendment would be very specific and narrow-scope, so this is not "opening IFRS 17 up again",
- the stable platform for IFRS 17 is very important, however, this possible amendment is smoothing implementation, rather than disrupting it,
- while the optionality of the amendment would mean a decrease of comparability between companies, comparability within the financial statements of the individual companies increases.
The staff will bring back detailed proposals for the possible narrow-scope amendment at a future meeting.
