The IASB issues IFRS 17, Insurance Contracts

The IASB issues IFRS 17, Insurance Contracts

International Financial Reporting Standard (IFRS) 4, Insurance Contracts was issued by the International Accounting Standards Board (IASB) as an interim standard in 2004.

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Background

International Financial Reporting Standard (IFRS) 4, Insurance Contracts was issued by the International Accounting Standards Board (IASB) as an interim standard in 2004.

This standard was meant to limit changes to existing insurance accounting practices.

Hence, it gave companies dispensation to continue accounting for insurance contracts using national accounting standards which resulted in a multitude of different approaches. This made it difficult for investors to compare and contrast the financial performance of otherwise similar companies. 

New development

The IASB completed its project of replacing IFRS 4 with a new comprehensive standard and issued IFRS 17, Insurance Contracts on 18 May 2017.

IFRS 17 is the first comprehensive international standard which provides guidance on accounting for insurance contracts. IFRS 17 is expected to resolve the comparison problems created by IFRS 4 by requiring all insurance contracts to be accounted for in a consistent manner, and is expected to benefit both investors and insurance companies.

This issue of IFRS Notes provides an overview of the requirements prescribed in IFRS 17.

Further, KPMG International has also prepared a SlideShare presentation on the requirements and possible impacts of IFRS 17. To access the text of the SlideShare presentation, please click here.

To access the text of the press release issued by IASB, please click here.

© 2017 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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