The International Accounting Standards Board (IASB) issued their revised Exposure Draft (ED) for IFRS 4 Phase II on 20 June 2013, with the comment period concluding on 25 October 2013. The proposed standard, if adopted will replace IFRS 4 Insurance Contracts and seeks to establish a single consistent recognition and measurement model, with complementary presentation and disclosure requirements aimed at enhancing transparency, for all insurance contracts issued by entities reporting under International Financial Reporting Standards.
This paper looks beyond the new accounting and reporting requirements, with the aim of exploring the main business and operational impacts of IFRS 4 Phase II and their associated implementation challenges. The changes will be far reaching and require further modifications to the financial operating model as well as the development of a communication strategy to educate both capital markets and executive management on the impact of the new accounting regime.
Given the fundamental change in financial management, the publication of the exposure draft (ED) in June 2013 is the ideal moment to assess impacts alongside Solvency II requirements and implementation plans. Businesses that tackle these issues early and have strategies and plans in place to address the challenges may gain a competitive advantage. To learn more and read our publication in full, please click on the brochure link below.