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UK Endorsement Board publishes final comment letter on the IASB’s proposed narrow-scope amendment to IFRS 17

  • UK Endorsement Board (UKEB) Image

28 Sep 2021

The UK Endorsement Board (UKEB) has published its final comment letter and feedback statement on the International Accounting Standard Board’s (IASB's) Exposure Draft ED/2021/8 'Initial Application of IFRS 17 and IFRS 9 - Comparative Information (Proposed Amendment to IFRS 17)'.

In the final comment letter, the UKEB:

  • Supports the proposals in the exposure draft indicating that the classification overlay 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.  However the UKEB recommends that the proposals in the ED be enhanced by clarifying that the chosen approach to the application of IFRS 9 impairment requirements is an accounting policy decision that shall be consistently applied in accordance with paragraph 13 of IAS 8 and is not made on an instrument-by-instrument basis.
  • 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.

The final comment letter and the feedback statement are available on the UKEB website.

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