Amendments respond to industry concerns about the impact of differing effective dates.
The differing effective dates of IFRS 9 Financial Instruments and the new insurance contracts standard could have a significant impact on insurers.
In response to concerns regarding temporary accounting mismatches and volatility, and increased costs and complexity, the IASB has issued amendments to IFRS 4 Insurance Contracts.
The amendments reduce the impacts, but companies need to carefully consider their IFRS 9 implementation approach to decide if and how to use them. The two optional solutions raise some considerations which require detailed analysis and management judgement.
“Given the looming effective date of IFRS 9, companies need to quickly consider the benefits and costs of the two optional solutions, and whether one should be elected.”
Temporary exemption from IFRS 9
When deciding if and how to use the amendments, consider:
When assessing the impact of these amendments on your business, consider the following.
If you would like to discuss the possible impacts on your business, please speak to your usual KPMG contact.
Our First Impressions contains insight and analysis that can help you assess the potential impact of the amendments on your business.
We will continue to report on significant developments and further decisions by the IASB on the forthcoming insurance contracts standard. Visit our IFRS – Insurance hot topics page. And visit our IFRS – Financial instruments hot topics page to find out more about IFRS 9.
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