2018年-普华永道全球_IASB_agrees_to_propose_limited_changes_to_balance_sheet_presentation_of_insurance_contract_assets_and_liabilities_PwC_10页_342kb

IFRS 17 Implementation Summary

Core Content

The International Accounting Standards Board (IASB) continued its discussions on the implementation of IFRS 17, focusing on concerns and challenges raised by stakeholders. A narrow-scope amendment was agreed to, allowing insurance contracts to be presented at the portfolio level rather than the grouping level in the balance sheet. The IASB also proposed a one-year deferral of the mandatory effective date of IFRS 17, extending it to annual periods beginning on or after 1 January 2022. This decision aims to minimize disruption for entities furthest along in implementation and ensure continued progress on adoption.

Main Points

1. Balance Sheet Presentation

• The IASB agreed to propose an amendment to present insurance contracts at the portfolio level, not the grouping level.
• A portfolio is defined as insurance contracts subject to similar risks and managed together.
• This change does not affect the recognition and measurement criteria, which remain at the group level.
• The amendment aligns with the criteria for potential changes, as it addresses operational concerns without causing significant information loss.

2. Premium Allocation Approach (PAA)

• Concerns were raised about the measurement of unearned premium liability under the PAA.
• Stakeholders argued that the current method of recording unearned premiums as they are due or written is more practical.
• The IASB noted that changing the PAA would result in a model that differs from the general measurement model, and thus no amendment was proposed.

3. Separate Presentation of Premiums and Claims

• The IASB decided not to amend IFRS 17 to allow separate presentation and measurement of premiums receivable and claims payable.
• This is because presenting them separately could imply they are not related, contradicting the fundamental structure of IFRS 17.
• Entities may, however, present a disaggregation of the prescribed line items if they choose to do so.

4. Discount Rates and Risk Adjustment

• The IASB agreed not to amend the use of locked-in discount rates for adjusting the contractual service margin (CSM).
• They also decided not to prescribe specific discount rates or limit risk adjustment techniques.
• Entities are required to disclose how they determine their discount rates and risk adjustments, ensuring transparency.

5. Other Key Decisions

• The OCI option for insurance finance income or expenses was not removed, as it would disrupt ongoing implementation.
• The definition of insurance contracts with direct participation features was not amended, despite some stakeholders believing it to be too narrow.
• The risk mitigation exception in the variable fee approach (VFA) was not extended to non-derivative instruments.
• The IASB agreed not to change the treatment of accounting estimates in interim financial statements.

Key Information

• Amendments Proposed: One narrow-scope amendment for portfolio-level presentation of insurance contracts.
• Effective Date: Deferred by one year to 1 January 2022.
• Implementation Challenges: 12 challenges were discussed, with 11 not meeting the amendment criteria.
• Future Discussions: The IASB plans to address additional issues in future meetings, including:
  • Acquisition cash flows for renewals outside the contract boundary
  • Initial recognition of reinsurance contracts when underlying contracts are onerous
  • Modified retrospective approach
  • Coverage units in the general model
  • Loans and other credit forms that transfer insurance risk

Additional Notes

• The IASB emphasized that any proposed amendments must be narrow in scope and not cause significant delays or information loss.
• The IASB has established a Transition Resource Group (TRG) to provide a public forum for discussing implementation issues.
• PwC has published several resources to support stakeholders in understanding and implementing IFRS 17.

Contact Information

For more information or to obtain PwC publications related to IFRS 17:

• Donald Doran – Partner, donald.a.doran@pwc.com
• Marie Kling – Partner, marie.kling@pwc.com
• Mary Saslow – Managing Director, mary.saslow@pwc.com