India defers Ind AS application for insurers following the issuance of IFRS 17
27 Jul 2017
India is currently in the process of adopting Indian Accounting Standards (Ind AS), which are substantially converged with International Financial Reporting Standards (IFRSs). Insurers were set to adopt Ind AS adoption from 1 April 2018. This has now been deferred by two years.
Following the issuance of IFRS 17 Insurance Contracts, the Insurance Regulatory and Development Authority of India (IRDAI) has reviewed the situation and has concluded:
- Since India does not have a standard equivalent to IAS 39, the implementation of Ind AS in the present form is likely to lead to mismatch in the asset and liability valuation and also cause volatility in the financial statements of the insurance companies.
- Compliance costs would be incurred twice, once immediately on implementation of Ind AS and secondly when IFRS 17 is implemented in India.
The regulatory override of the implementation of Ind AS in the insurance sector in India is available on the IRDAI website.
