First Impressions provides an overview of the new IFRS 17 Standard and how it may affect insurers’ financial statements.
Our newly launched First Impressions: IFRS 17, Insurance Contracts’
publication is intended to help insurers assess the impact of the new IFRS 17
standard and prepare for transition.
Additionally, it explains the key requirements of IFRS 17 with the use of illustrative examples and features KPMG’s insights.
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.
The IASB completed its project of replacing IFRS 4 with a new comprehensive standard and on 18 May 2017 issued IFRS 17, Insurance Contracts. IFRS 17 is effective from 1 January 2021.
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.
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