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Initial application of IFRS 17 and IFRS 9 ― Comparative information

 

Background

Many insurance companies have not yet applied IFRS 9 Financial Instruments and will first apply it at the same time they apply IFRS 17 Insurance Contracts. However, the two standards have different requirements for the comparative information that will be presented on initial application. IFRS 17 requires companies to present one restated comparative period. IFRS 9 permits but does not require restatement of comparative periods, and prohibits companies from applying IFRS 9 to financial assets derecognised in the comparative period.

Some insurers have since raised concerns about the usefulness of the information that would be presented for financial assets in the comparative period on initial application of IFRS 17. They are of the view that such information would be misleading because it would include accounting mismatches that would essentially arise from the continued application of IAS 39 (i.e. would not represent economic mismatches), which would be very difficult to explain. These insurers asked the Board to allow them to present significantly improved information about financial instruments that would result from applying the classification requirements of IFRS 9 at the transition date of IFRS 17.

 

Current status of the project

The IASB first discussed this issue in May 2021 and an exposure draft of proposed amendments was published on 28 July 2021 with comments requested by 27 September 2021.

 

Project milestones

Date Development Comments
May 2021 Issue first discussed by the IASB
28 July 2021 ED/2021/8 Initial Application of IFRS 17 and IFRS 9 — Comparative Information (Proposed amendment to IFRS 17) published Comments requested by 27 September 2021

 

Correction list for hyphenation

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