Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts — Agenda paper 14

During the development and exposure of the proposal to amend IFRS 4 for entities with insurance contracts, that are applying IFRS 9, the IASB received few comments about the proposed disclosures.  However, now that the Board has made all of the decisions about the amendments, some constituents have provided additional feedback on the disclosures.  They observe that they will have to assess whether some assets are solely interest and principal for the purposes of the disclosure requirements only while these amendments are in effect.  When they eventually apply IFRS 9, they would no longer need to perform that assessment on some assets measured at fair value through profit or loss.  Some assets will be held in an ‘other’ business model and measured at fair value through profit or loss, irrespective of their contractual cash flows.

The staff thinks this is a concern that merits consideration by the Board.  Accordingly, the staff are recommending that the disclosures be simplified by aligning the scope of the fair value disclosures with the scope for the credit risk disclosures.