Insurance and IFRS 9

Date recorded:

Amendments to IFRS 4: Applying IFRS 9 Financial Instruments with IFRS 4 Insurance Contracts — Agenda paper 14

During the development and exposure of the proposal to amend IFRS 4 for entities with insurance contracts that apply IFRS 9, the IASB received few comments about the proposed disclosures. However, now that the IASB has made all of the decisions about the amendments, some constituents have provided additional feedback on the disclosures. They observe that they will have to assess whether some assets are solely interest and principal for the purposes of the disclosure requirements only while these amendments are in effect. When they eventually apply IFRS 9, they would no longer need to perform that assessment on some assets that will be measured at fair value through profit or loss either due to designation or because they belong to the residual business model for which the only measurement category is fair value through profit or loss.

The Staff observed that this concern merits consideration by the IASB. Accordingly, the Staff recommends that the disclosures be simplified by aligning the scope of the fair value disclosures with the scope for the credit risk disclosures.

IASB discussion

The Staff stated that aligning the scope of the disclosures will make the fair value disclosures easier to apply, but will still enable some comparisons to be made between entities that apply the temporary exemption from IFRS 9 with those entities applying IFRS 9 and that this objective would be achieved without imposing excessive costs on preparers.

One IASB member stated that she supported the Staff recommendation, and that it was a good change, especially for those entities that are managing the performance of financial assets on a fair value basis.

Another IASB member suggested reversing the order of the assessment of the two groups of financial assets. The Staff stated that they would consider this, but noted that the assessment could be done in either order depending on the financial assets that are held.


The IASB voted unanimously in favour of the Staff recommendation.

Next steps

The Staff will reflect the IASB’s decision in the next draft of the amendments which are targeted for publication in September 2016.

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