FSB welcomed the final publication of IFRS 17, which is the new accounting standard on insurance contracts. IFRS 17 was identified as a high-priority standard at the FSB Plenary meeting of September 25, 2015. IFRS 17 (issued by IASB) will become effective on January 01, 2021, subject to the relevant endorsement or adoption procedures in IFRS jurisdictions, which provides enough time for insurers to adapt processes, systems, and organizational structures.
IFRS 17 introduces a consistent approach applicable to all insurance contracts in jurisdictions applying IFRS. Insurance obligations will be accounted for using current values, instead of historical cost, benefiting both investors and insurance companies. FSB encourages firms to start the implementation efforts as soon as possible and to engage in an open dialog with IASB on the ways in which the application of IFRS 17 can generate the most relevant information. Insurance regulators should be part of this dialog and may consider best ways to support consistent and practical application of the standard. During the implementation stage, enhanced dialog with auditors and market authorities will also be important. Relevant disclosures from reporting entities should aid in the understanding of the methodologies and assumptions used in developing those estimates.
Related Link: Press Release
Effective Date: January 01, 2021
Keywords: International, Insurance, Accounting, IFRS 17, IASB, FSB
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