IASB sets up transition group for IFRS 17 Insurance Contracts

The International Accounting Standards Board (IASB) is to set up a transition resource group to support the implementation of IFRS 17 Insurance Contracts, which is set for a May 2017 release

The long-awaited International Financial Reporting Standards (IFRS) insurance contracts framework is being issued as a new standard, replacing IFRS 4, as the current rules on accounting for insurance contracts do not provide users with the information they need to meaningfully understand the insurer’s financial position, performance and risk exposure.

The IASB has confirmed that the standard will be issued in May 2017.

This is necessary because of the introduction of IFRS 9 Financial Instruments, since the existing insurance contracts standard is not compatible.

In addition, IFRS standards do not address specific insurance issues and it is not obvious how insurers should deal with these issues under current IFRS Standards.

The transition resource group will be set up once the standard has been issued before the end of March this year. The membership will reflect the group’s mandate and objectives, which have yet to be decided, IASB confirmed at a recent board meeting. IASB will issue a call for participation in the group at a later date.

IAS 8 exposure draft plans

The IASB has also clarified an interpretation issue on the proposed amendments to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, as set out in the Exposure Draft. The wording has been changed to ‘accounting estimates’ rather than ‘a change in accounting estimate’.

This replacement will make it easier for readers to compare the definitions of accounting policies and accounting estimates, and will clarify what the IASB is intending to achieve in its proposal to amend IAS 8.

A consultation document on the revisions to IAS 8 will be released in Q2 2017.

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