The International Accounting Standards Board (IASB) recently released amendments to International Financial Reporting Standard (IFRS) 17, Insurance Contracts, which included the following changes, among several others:
- Deferring the effective date of IFRS 17 by two years from annual reporting periods beginning on or after January 1, 2021 to annual reporting periods beginning on or after January 1, 2023
- Requiring a company to exclude some credit cards (and similar contracts) from the scope of IFRS 17
- Permitting a company to apply either IFRS 17 or IFRS 9, Financial Instruments, to some loans
- Requiring a company to present insurance contract assets and liabilities on the balance sheet in portfolios instead of in groups
- Providing an option for a company to change the estimates made in previous interim financial statements when applying IFRS 17 subsequently and a simplification at transition for companies that choose not to change such estimates
- Requiring a company that recognizes losses on insurance contracts on initial recognition to recognize at the same time expected recoveries of those losses from reinsurance contracts held that the company entered into before or at the same time as the loss-making insurance contracts were recognized
- Extending the risk mitigation option available when an entity uses derivatives to mitigate financial risk arising from insurance contracts with direct participation features
The IASB also issued an amendment to IFRS 4, Insurance Contracts, so that eligible insurers can still apply IFRS 9 alongside IFRS 17.
Additional information about the amendments is publicly available in the IASB’s Project Summary and Feedback Statement, Amendments to IFRS 17.