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Different effective dates of IFRS 9 and the new insurance contracts standard

Background

As it has become obvious that the effective date of the forthcoming IFRS on insurance contracts can no longer be aligned with the effective date of IFRS 9 Financial Instruments there have been calls for the IASB to delay application of IFRS 9 for insurance activities and align the effective date of IFRS 9 for those activities with the effective date of the new insurance contracts standard. In July 2015, the IASB tentatively decided to amend IFRS 4 Insurance Contratcs to address the consequences of different effective dates of IFRS 9 and the new insurance contracts standard. In September 2015, the IASB decided to also include in the ED it intends to issue on this problem a proposal to defer IFRS 9 for insurers to 2021.

 

Current status of the project

On 12 September 2016, the IASB issued Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4) providing two options for entities that issue insurance contracts within the scope of IFRS 4: the overlay approach and the deferral approach.

 

Project milestones

Date Development Comments
July 2015 IASB decides to propose amendments to IFRS 4
September 2015
IASB decides to include a proposed deferral of IFRS 9 for insurers in its ED
ED expected late in 2015
9 December 2015
ED/2015/11 Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Proposed amendments to IFRS 4) published
Comments requested by 8 February 2016
12 September 2016
Applying IFRS 9 'Financial Instruments' with IFRS 4 'Insurance Contracts' (Amendments to IFRS 4) issued
An entity choosing to apply the overlay approach retrospectively to qualifying financial assets does so when it first applies IFRS 9. An entity choosing to apply the deferral approach does so for annual periods beginning on or after 1 January 2018.

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