The long-anticipated new Indonesian Financial Accounting Standards on insurance contract, PSAK 74 Insurance Contract, was issued at the end of November 2020 and will be effective on 1 January 2025; however, early adoption is permitted. This new insurance contracts standard aims to increase transparency as it brings new level of transparency, giving users more insight into an insurer’s financial health than ever before. It adopts IFRS 17 Insurance Contracts, a standard that is also aimed to reduce diversity in the accounting for insurance contracts around the world
This publication briefly highlights key requirements introduced by the new standard. As the new requirements could have major impacts across an organization, entities need to start planning for the transition, including managing changes to systems and processes.