IASB will propose narrow-scope amendment to IFRS 17

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22 Jun 2021

At its meeting this morning, the IASB discussed a possible narrow-scope amendment to IFRS 17 'Insurance Contracts' presented by the staff. The staff has developed an optional classification overlay approach that would address one-time classification differences that may arise in the comparative information that insurers will present on initial application of IFRS 17 and IFRS 9.

This classification overlay would:

  • apply to financial assets that are related to insurance contract liabilities and to which IFRS 9 has not been applied in the comparative period(s);
  • allow an entity to classify those financial assets in the comparative period(s) in a way that aligns with how the entity expects those assets would be classified on initial application of IFRS 9;
  • apply for comparative periods that have been restated for IFRS 17 (that is, from the transition date to the date of initial application of IFRS 17); and
  • apply on an instrument-by-instrument basis.

In the discussion, all Board members who spoke supported the amendment. When asked to vote, 13 Board members stated that they are satisfied that the Board has complied with the applicable due process steps and should begin the balloting process to publish an exposure draft; 12 Board members agreed with setting a 60-day comment period for the exposure draft; and no Board member intends to dissent from the proposals in the exposure draft.

The staff expects to publish the exposure draft by the end of July and aims at publishing a final amendment at the end of the year.

For a detailed summary of this session, please see Deloitte's observer notes.

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