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EFRAG recommends endorsement of IFRS 9, but withholds comments on insurance industry

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

15 Sep 2015

The European Financial Reporting Advisory Group (EFRAG) has finalised the long-awaited endorsement advice on IFRS 9 ‘Financial Instruments’. EFRAG states that 'overall IFRS 9 is conducive to the European public good, except for the impact on the insurance industry of applying IFRS 9 before the finalisation of the forthcoming insurance contracts standard'.

EFRAG points out that the IASB is working currently working on one or more solutions for the insurance industry. In fact, the IASB's meeting next week will see four hours of discussion around 'Insurance Contracts: IFRS 9 and IFRS 4' and first agenda papers have been made available indicating that two approaches (the "overlay approach" and the "deferral approach") are will be considered. EFRAG states that it will advise the European Commission of its views as the IASB’s work develops and on that basis will provide further advice relevant for the insurance industry.

Over all, EFRAG recommends that all businesses in the European Union other than those carrying out insurance activities should be required to account for their financial instruments in compliance with IFRS 9 as off 2018. And even businesses carrying out insurance activities should be permitted to aplly IFRS 9 from the same date.

Please click to access the press release and the 97 page endorsement advice on the EFRAG website as well as the updated EFRAG endorsement status report.

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