Insurers have been watching the wave of accounting change surface on the horizon for years. Now, due to delays in the IASBs insurance contracts project, that wave my not make land in one single, sweeping change.
In this podcast we discuss the critical aspects of IFRS accounting change for insurers, IFRS 9: Classification and measurement requirements, effective 1 January 2018.
Financial instruments are a fundamental part of an insurers’ balance sheet and therefore it is essential to analyze the impacts of the new standard carefully. It is also important to consider the interaction between accounting for financial instruments and insurance contracts in order to minimize accounting mismatches. This is particularly challenging as IFRS 9 becomes effective before the forthcoming insurance contracts standard. The implications of both standards will go beyond just accounting to be felt broadly across systems, data and organizational-wide processes.
Adoption of the forthcoming IFRSs will be a significant change for many insurers and consideration should be given to planning their adoption separately despite the possibility that IFRS 9 may be deferred.
We hope you find this podcast of interest. Watch for our next podcast, due out in September, on the variable fee approach for participating insurance contracts.
For further reading on this topic please see our article, Challenges posed to insurers by IFRS 9’s classification and measurement requirements.
With a final standard for Insurance Accounting Contracts now in sight, the industry is looking at the most effective way to implement IFRS with as little disruption to reporting as possible.
IFRS 9 financial instruments and additional challenges for insurers around classification and measurement.