IFRS 4 Phase II – Insurance contracts | KPMG | NL

IFRS 4 Phase II – Insurance contracts

IFRS 4 Phase II – Insurance contracts


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The IASB is close to finalizing IFRS 4 Phase 2 as the majority of the requirements have been tentatively agreed upon by the Board, including those for the detailed and complex presentation. IFRS 4 Phase 2 is likely to include certain disclosures from the existing standard, IFRS 4, in addition to several new presentations and disclosures. The goal is to improve the comparability and increase transparency in accounting for insurance contracts. The standard is expected to be effective approximately three years after the issuance of the final standard (beginning 2020) and will be confirmed later this year. The standard is not only applicable to pure insurance entities, but all entities that issue insurance or reinsurance contracts.


For insurers, it would be important to fully understand and determine the financial information presented and disclosed in their public financial statements before designing and developing systems and processes to meet the new reporting requirements. Another important strategic dimension to be considered is how stakeholders may respond to the new information presented. There are a few fundamental differences between IFRS 4 Phase 2 and Solvency II. Thus, despite a successful implementation of a modern solvency system, further action would be needed to address the new requirements. Many insurers, especially those that will apply the BBA, would require to use all of the available time for implementation, given the complexity of the new requirements.

Author: Frank van den Wildenberg

Further information
What’s next, IFRS 4 fase 2 
IFRS 4 standaard in ballotagefase 
KPMG’s insights on accounting change for insurers

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