The only way to fully understand the potential impact of IFRS 17 is to work through the calculations.
KPMG’s global accounting change team recently conducted the complex exercise of working through the impacts of IFRS 17 using illustrative examples.
These disclosures will be required both for insurance contracts issued and reinsurance ceded. Separate movement analysis will also be required for insurance contracts and reinsurance contracts issued. Our current interpretation of the presentation and disclosure requirement is based on the 2014 ED, supplemented by the IASB’s subsequent deliberations up to, and including October 2015.
Although the IASB substantially completed its redeliberations on the presentation and disclosure requirements at its 21 October 2015 meeting, further changes to these requirements may be made during the drafting stage before the forthcoming standard is published.
Given the complexity of the new requirements, we wanted to undertake this exercise to provide insurers and reinsurers with an understanding of the level of detail and potential impacts on financial statement reporting. Additionally, new IT systems can be planned for with greater confidence, building in the new requirements and future-proofing investments.