Update on IFRS 17 – Insurance Contracts
At its November meeting, the IASB decided to postpone the introduction of IFRS 17 – Insurance Contracts for a year. This means that instead of coming into effect for reporting periods commencing as of 1 January 2021, the standard will eventually be of mandatory application to periods beginning on or after 1 January 2022.
Keywords: Mazars, Thailand, IFRS 17, Insurance Contracts, IASB, IFRS
14 January 2019
The IASB also decided to extend for a year (i.e. to 2022) the maximum deferral period for the application of IFRS 9 – Financial instruments by insurance entities. This option to defer IFRS 9 was introduced through a 2016 amendment to IFRS 4 – Insurance contracts and it is subject to conditions (in particular, entities must have a predominance of insurance liabilities).
These decisions must be seen against the background of a more general review of IFRS 17 after stakeholders reported a number of problems.
IASB staff identified 25 areas in which IFRS 17 had been criticised or had posed implementation challenges which may require IFRS 17 to be re-opened.
The staff paper can be consulted on the IASB site.
In the coming months, the IASB should review these areas in order to identify the priority themes and to define the scope and content of future amendments, in accordance with the criteria for reopening IFRS 17 agreed in October. The IASB may reopen certain topics only where the amendments:
- would not result in significant loss of useful information relative to that which would be provided for by the existing text of IFRS 17 (i.e. any amendment would avoid reducing the relevance or the faithful representation of information, or creating inconsistency with other IFRS standards or increasing complexity for users of financial statements); and
- would not unduly disrupt implementation processes that are already under way or risk even longer delays in the effective date of the standard.