UKEB draft comment letter on the IASB's proposed narrow-scope amendment to IFRS 17

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09 Aug, 2021

The UK Endorsement Board (UKEB) has issued a draft comment letter on the IASB exposure draft ED/2021/8 'Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Proposed amendment to IFRS 17)'.

In the draft comment letter, the UKEB:

  • supports the proposals in the exposure draft indicating that they will enable insurers to increase the relevance and understandability of comparative information on transition to IFRS 17 Insurance Contracts by permitting them to avoid classification mismatches that arise purely from differences in transition requirements between IFRS 9 Financial Instruments and IFRS 17.
  • Agrees that the classification overlay should be optional and be applied on an instrument-by-instrument basis.
  • Agrees that entities should present comparative information as if the classification and measurement requirements of IFRS 9 had been applied to financial assets within the scope of the classification overlay based on reasonable and supportable information available at the transition date.
  • Supports permitting, but not requiring, entities to apply the impairment requirements in IFRS 9 to financial assets within the scope of the classification overlay. 
  • Provides some recommendations to enhance the proposals in the ED including enhancements to the disclosure requirements to allow greater transparency for users of financial information.

Comments are requested by 30 August 2021.  The draft comment letter and separate invitation to comment are available on the UKEB website.

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