At a Board meeting on Wednesday 14th of November, the International Accounting Standards Board, or IASB, tentatively decided to propose an amendment of the IFRS 17 effective date to reporting periods beginning on or after 1 January 2022. This is a deferral of one year compared to the current date of 1 January 2021.
The Board also decided to propose an amendment to IFRS 4 to allow insurers qualifying for deferral of IFRS 9 one additional year of deferral. This would mean that qualifying insurers could apply both standards for the first time to reporting periods beginning on or after 1 January 2022.
Download our latest Insurance Accounting Alert, below, for the full details on the decision to defer IFRS 17 – including the arguments of stakeholders for and against a delay to the effective date.
Our view is that most insurers will welcome the extra year, which will enable them to implement IFRS 17 in a more controlled fashion. This will allow a more robust implementation process, with time for additional analysis of the financial impact of any options available and a greater understanding of results. The extra time will also be valuable for companies to provide further education and raise greater awareness with analysts and other stakeholders about the impact of IFRS 17 on an entity’s results both on transition and on an ongoing basis. We do not expect insurers to put projects on hold at this point, but some may opt to re-phase activities and may result in a rebalancing of the mix between internal and external resources for some companies.
Over the coming months we will watch developments closely to monitor the extent of any amendments to the standard proposed by the IASB, with a number of areas of concern highlighted by EFRAG and other interested parties, albeit large scale changes to the requirements are not anticipated at this stage.
If you have a question, don’t hesitate to reach out. You can also explore all our IFRS 17 insights here.