IFRS 17 is intended to standardize insurance accounting globally to improve comparability and increase transparency—and to give users of accounts the information they need to understand the insurer's financial position, performance, and risk exposure. IFRS 17 will replace IFRS 4 on accounting for insurance contracts.
The standard sets a paradigm that introduces several new concepts and terminologies that will lead to updated financial statements based on revised aggregates.
In this paper, we discuss a proposed accounting scheme for a non-onerous group under the GMM approach, which would be the most typical case for the life business. We suggest some names for accounts, explain which transactions affect the P&L, show how the CSM mechanics translate into journal entries, and propose using suspense accounts to add transparency to the analysis.
Read “IFRS 17 accounting: Turning theory into practice” to learn more.