This IFRS newsletter brings you the latest on the IASB’s insurance project.
The IASB has agreed on a comment period of 60 days for the exposure draft to amend IFRS 4 Insurance Contracts, decided not to pursue the mirroring approach proposed in the exposure draft and made several other decisions on transition.
It also considered presentation and disclosure requirements, and revisited earlier decisions in terms of how effective they would be in responding to feedback received from stakeholders.
“While working to address the consequences of differing effective dates, the IASB continues to make progress on participating contracts and the completion of its re-deliberations appears to be near.”
Differing effective dates
At its October meeting, the IASB agreed on a comment period of 60 days for the exposure draft to amend IFRS 4 and decided that first-time adopters of IFRS would be prohibited from applying the deferral and overlay approaches.
The IASB had previously discussed these approaches as temporary measures to address the accounting consequences of applying IFRS 9 Financial Instruments before the forthcoming insurance contracts standard.
The staff expect the exposure draft to amend IFRS 4 to be issued in December 2015 and any finalised amendments to be issued during Q3 2016.
Classification and measurement on transition
Also this month, the board decided on criteria for certain transition reliefs and when comparative information would be restated.
Because the variable fee approach would address certain stakeholder concerns, the IASB also decided not to pursue the mirroring approach proposed in the ED.
Presentation and disclosure
The IASB also considered presentation and disclosure requirements for insurance contracts.
It revisited various decisions that it has made since publishing the ED, and considered how effective they would be in responding to feedback received from preparers and users of financial statements.
The IASB has now completed most of its re-deliberations. The remainder, which include evaluating the differences between the general model and the variable fee approach for participating contracts, will be discussed at a later meeting.
An effective date will not be discussed until all other re-deliberations have been completed.