A much anticipated IFRS 17 was released on 18 May 2017 – well, at least it is termed a “much anticipated” standard in many of the newly released IFRS 17 publications and articles.
A much anticipated IFRS 17 was released on 18 May 2017– well, at least it is termed a “much anticipated” standard in many of the newly released IFRS 17 publications and articles. For many following the development of the new Insurance standard, it has been a long and often tedious journey; one that left many suffering from “IFRS 17 fatigue” and wondering whether the standard would ever officially be published.
Now that the standard has made it into the realm of issued and not simply proposed, it remains to be seen how accepted it will become over the next few years. Given the often less than helpful guidance in the current IFRS 4 standard, the insurance industry as a whole has become accustomed to a rather large amount of leeway. While most of the common insurance accounting elements have become ingrained in accepted industry practice, the outlying, strange and uncommon parts of insurance accounting often lie in a very grey area.
IFRS 17 seeks to bolster the comparability of insurance financial statements, but with that, comes a decidedly reduced grey area. Of course, it still remains an IFRS standard, based on principles rather than rules, and the grey will never be completely removed.
Insurers are now preparing to embark on a transitional journey over the next three years. Whether the insurer is one of the more eager market participants, ready to adop the standard long before the official effective date, or lagging at the latter end of the curve not wanting to adopt before absolutely necessary and ultimately scrambling to get everything in order before signing off their first set of accounts under IFRS 17 – everyone will inevitably find themselves with new looking IFRS accounts in a few years.
The question becomes what kind of journey the next three years will be.
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