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IASB tentatively decides to defer the IFRS 17 effective date

  • IASB meeting (blue) Image

14 Nov 2018

At its meeting currently held in London, the IASB discussed the effective date of IFRS 17 'Insurance Contracts' and tentatively decided to defer it to annual periods beginning on or after 1 January 2022. The IASB also tentatively decided to defer the fixed expiry date for the temporary exemption to IFRS 9 in IFRS 4 by one year so that all insurance entities must apply IFRS 9 for annual periods on or after 1 January 2022.

In its decision on the effective date of IFRS 17, the IASB followed the staff's line of argument that the Board plans to consider whether to explore amendments to IFRS 17 and that any uncertainty about those amendments could disrupt the progress of implementing IFRS 17. Together with the significant change that IFRS 17 will cause, this constitutes exceptional circumstances that justify the deferral. 14 Board members voted for deferring the effective date of IFRS 17.

The deferral of the fixed expiry date for the temporary exemption to IFRS 9 was a more contentious issue as the deferral would mean that some entities would not apply IFRS 9 up to four years after all other entities. However, the IASB concluded that without the deferral there would be two sets of major accounting changes in a short period of time resulting in significant cost and effort for preparers of financial statements. Avoidance of this had been the Board's original reason for providing the temporary exemption. 13 Board members voted for deferring the expiry date of the exemption.

The IASB has issued a press release noting the intended deferral.

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