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IASB amends insurance contracts standard

  • IASB document Image

Sep 12, 2016

The IASB has published "Applying IFRS 9 'Financial Instruments' With IFRS 4 'Insurance Contracts.'"

The amendments address concerns about the different effective dates of IFRS 9 and the IASB’s forthcoming insurance contracts standard, which is expected to be issued as IFRS 17 within the next six months. Under the amendments, an entity that issues insurance contracts within the scope of IFRS 4 has two options:
  • Overlay approach — Permits entities to reclassify — from profit or loss to other comprehensive income — some of the income or expenses arising from designated financial assets. An entity would apply the overlay approach retrospectively to qualifying financial assets when it first applies IFRS 9.
  • Deferral approach — Temporary exemption from applying IFRS 9 for entities whose predominant activity is issuing contracts within the scope of IFRS 4. An entity would apply the deferral approach for annual periods beginning on or after January 1, 2018. 

In addition, an entity is permitted to stop applying either approach before applying the new insurance contracts standard.

For more information, see Deloitte's IFRS in Focus newsletter as well as the press release on the IASB's Web site and the standard on the IASB's eIFRS Web site (subscription required).

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