Preparing the Market for IFRS 17
Several important proposed amendments to IFRS 17 emerged from the IASB's January Board meeting. The proposals cover four topics:
The proposals would help reduce accounting mismatches and complexity. They also mean that insurers would need to exercise judgement in new areas when applying the standard. Read our web article to find out more.
An amendment to the new insurance contracts standard, IFRS 17, has been proposed by the IASB at its December 2018 meeting.
The proposal aims to provide practical relief to insurers by requiring them to present insurance contracts on the balance sheet at the portfolio level – a higher level of aggregation than currently required by IFRS 17.
The Board also discussed 12 other topics at the meeting, but did not propose any amendments in these areas.
A previous KPMG benchmarking study ‘In it to win it’ showed many insurers were facing a struggle against the clock with the original timeline for IFRS 17. Our following article 'When Opportunity Comes Calling' indicates that the additional year brings not only more time — but an opportunity to better understand results and optimize performance on an IFRS 17 basis. The extra time also brings the prospect of delivering greater value from finance, by developing a roadmap to a better financial reporting capability and, as a minimum, containing future costs. But the change also brings challenges. Some insurers would have liked a longer deferral and the additional year is to enable entities to adapt to further changes to the standard, albeit aimed at reducing its complexity. So it’s crucial that insurers don’t take their foot off the gas, thinking that they will pick up the pace later: that multiplies risks and cost. Instead, the opportunity now presents itself to be more ambitious in those areas where you can derive greater value from change and to better understand results in the new world.