At its March 2020 Board meeting, the International Accounting Standards Board (IASB or the Board) completed its planned re-deliberations on the proposed amendments in the Exposure Draft Amendments to IFRS 17 Insurance Contracts (the ED), in line with the plan outlined in its November 2019 meeting. At the meeting, the Board:
The staff expects the amendments will be issued in the second quarter of 2020.
The decision of the Board means preparers are effectively granted one year more to prepare for the initial application of IFRS 17 and IFRS 9, compared to the proposals in the Exposure Draft. Even though the Board decided not to make a change for some fundamental topics (e.g., the annual cohort requirement), there are still a number of changes made during the re-deliberation that will have a significant impact on implementation efforts. Particularly the decisions regarding the recovery of losses by reinsurance held, investment expenses included in fulfilment cash flows, recognition and impairment of assets arising from insurance acquisition cash flows, and the impact of the reporting frequency on the treatment of accounting estimates will require significant evaluation and may cause preparers to rethink some of their IFRS 17 solutions.
Preparers should therefore address the following key tasks in the near future:
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