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IASB publishes proposed amendments to IFRS 17

  • IASB document Image

Jun 26, 2019

The IASB has published an exposure draft (ED), “Amendments to IFRS 17,” to address concerns and implementation challenges with IFRS 17, “Insurance Contracts,” which was published in 2017.

Revisions made by the proposed amendments would include:

  • Deferral of the date of initial ap­pli­ca­tion of IFRS 17 by one year to annual periods beginning on or after January 1, 2022, and change in the fixed expiry date for the temporary exemption in IFRS 4, Insurance Contracts, from applying IFRS 9, Financial In­stru­ments, so that entities would be required to apply IFRS 9 for annual periods beginning on or after January 1, 2022.
  • Optional scope exclusion for loan contracts that transfer sig­nif­i­cant insurance risk and related tran­si­tion re­quire­ments to enable entities issuing such contracts to account for those contracts by applying either IFRS 17 or IFRS 9.
  • Scope exclusion for credit card contracts that provide insurance coverage.
  • Amend­ments related to al­lo­ca­tion, recog­ni­tion, re­cov­er­abil­ity assessment, and dis­clo­sure of insurance ac­qui­si­tion cash flows associated with expected contract renewals.
  • Amend­ments related to the con­trac­tual service margin al­lo­ca­tion.
  • Extension of the risk mit­i­ga­tion option to rein­sur­ance contracts held.
  • Requirement for entities to recognize a gain on rein­sur­ance contracts held when, at initial recog­ni­tion, such entities also recog­nized losses on onerous insurance contracts issued.
  • Sim­pli­fied pre­sen­ta­tion of insurance contracts in the statement of financial position.
  • Tran­si­tion relief related to business com­bi­na­tions.
  • Tran­si­tion relief related to the date of ap­pli­ca­tion of the risk mit­i­ga­tion option and the use of the fair value tran­si­tion approach.

The proposed effective date for the amend­ments would be the same as the proposed new effective date for IFRS 17 (January 1, 2022). Early ap­pli­ca­tion would be permitted. The amend­ments would be applied ret­ro­spec­tively.

Comments on the proposed amendments are due by September 25, 2019. For more information, see Deloitte's IFRS in Focus newsletter as well as the press release, snapshot, and ED on the IASB’s Web site.

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