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Latest updates on IFRS 17 Insurance Contracts

Insurance Consulting and Technology
IFRS 17 Solutions

February 6, 2020

Updates and analysis of the latest International Accounting Standards Board decisions.

Latest News



January 2020

Continued deliberation on certain items of the IFRS 17 Exposure Draft

On 30 January 2020 the IASB continued deliberation on certain items of the IFRS 17 Exposure Draft issued in June 2019, consistent with the schedule agreed in November 2019. The IASB confirmed that it expects to finalise discussion of the remaining technical topics at its February meeting, thereby allowing the Board to consider the overall set of amendments as a package together with any implications for the effective date at the March meeting.

The Board decided not to amend the treatment of contracts acquired in their settlement period, other than on transition to IFRS 17. The treatment prescribed by IFRS 17 represents a departure from current accounting practice in most jurisdictions and will bring additional complexity by requiring entities, largely P&C insurers, to use the GMM and presentation of CSM and revenue on an open portfolio of outstanding claims.

The Board tentatively decided to amend paragraph B137 of IFRS 17, which will impact firms planning on using IFRS 17 for interim reporting. The change, which will enable entities to choose as an accounting policy the ability to change previous interim estimates in subsequent interim or annual reporting, is of significant practical benefit, and will help avoid a potential difference between group and subsidiary reporting. However there are other potential differences between group and subsidiary reporting that firms still need to consider.

The Board also decided that at transition, an entity is required to calculate an asset for insurance acquisition cash flows in respect of acquisition cash flows prior to the transition date relating, wholly or in part, to future unrecognised groups of renewed contracts. The relevant sections of the IFRS 17 Standard: Appendix C – Effective date and transition, will be amended accordingly. If application of the full retrospective approach is impracticable and the modified retrospective approach or the fair value approach are adopted, a determination of an asset for acquisition cash flows will still be required, with separate considerations for each method.


December 2019

IFRS 17: Proposed changes focus on reinsurance contracts

The International Accounting Standards Board (IASB) met on 11 December to begin the process of redeliberating some of the changes proposed in the June Exposure Draft (ED) and has decided to defer discussions on the effective date of IFRS 17 until the extent and complexity of all the amendments has been determined, expected end of February 2020.

The IASB’s intention to allow insurers to recognise gains on reinsurance contracts held in respect of groups of onerous underlying contracts had been welcomed by respondents since it addressed a fundamental accounting mismatch in the original standard. However, most respondents, including Willis Towers Watson, expressed concerns that the scoping of the relief had been drawn too narrowly in restricting use to a very limited range of reinsurance contracts. In response, the Board has agreed to significantly broaden the scope allowing losses on initial recognition of the underlying contracts to be offset by the matching reinsurance.

Read the full press release.


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