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EFRAG field-test results on the revised IASB ED Insurance Contracts

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

16 Jan 2014

The European Financial Reporting Group (EFRAG) has issued a report containing the results of the field test conducted by the EFRAG and National Standard Setters (NSS) ANC, ASCG, FRC and OIC, on whether the new requirements in the revised Exposure Draft are operational, what their impact would be and the costs and benefits associated with introducing them.

After the IASB had published its revised Exposure Draft Insurance Contracts on 20 June 2013 EFRAG and the National Standard Setters from France, Germany, Italy and the UK, in coordination with the IASB staff, carried out a field-test on the proposed new requirements from July to October 2013.

The focus of the field test was the practical application of the new requirements and was intended to gather solely facts and objective data, rather than views and opinions.

The most commonly stated areas of concern related to: 

Applying the 'mirroring approach' to contracts that specify a link to the returns on underlying items.

Applying the revenue proposals to life insurance contracts.

The mandatory requirement to use other comprehensive income for presenting the effects of changes in the discount rate on insurance.

 

More information on the results of the field test are available on the EFRAG website.

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