Financial Services Ireland

Insurance Accounting Alert, June 2018

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The International Accounting Standards Board (IASB) has proposed narrow-scope amendments to IFRS 17. These minor changes are intended to ensure the wording of the standard is consistent with the decisions that the IASB made in the development of the standard.

Our view is that the amendments provide helpful clarification. Our latest Insurance Accounting Alert, which can be downloaded below, provides full details – but here’s what you need to know now:

  • The IASB agreed to staff proposals to include several minor changes to IFRS 17 in its next Annual Improvements Cycle. These narrow-scope amendments address instances where the drafting of IFRS 17 did not achieve what the Board intended.
  • One change will clarify that investment-related services are to be considered in determining the coverage period for allocation of the contractual service margin to profit or loss for contracts with direct participation features (accounted for under the variable fee approach). This change does not apply to contracts accounted for under the general model or the premium allocation approach.
  • The IASB clarified that the requirements in IFRS 17 on how to account for insurance contracts acquired in a business combination do not apply to business combinations between entities under common control.
  • The requirement to assess on acquisition date whether contracts acquired in a business combination are insurance contracts will apply only to business combinations that occur after the date of initial application of IFRS 17.
  • In addition, the Board agreed to six other amendments.

If you have a question, or would like to discuss these topics further, please do get in touch.

Thought Leaders

Ciara McKenna

FS Partner, Assurance, Insurance

Niamh O’Shaughnessy

FS Partner, Assurance, Insurance & Banking

Ciara Fitzpatrick

FS Partner, Consulting, Insurance