On 15 December 2017, an amendment to the implementing regulation to the Accounting Act for insurance companies was published in the Collection of Laws under number 443/2017 Coll.
The main reasons for the amendment to Regulation No. 502/2002 Coll., for reporting entities that are insurance companies (hereinafter the “Regulation Amendment”), were as follows:
We believe that the most important change from the perspective of insurance companies is the inclusion of a new paragraph 6 in Section 3, which stipulates that for the purposes of presentation, measurement and disclosure of information in the notes to the financial statements regarding securities, equity investments and derivatives and transactions with them, a reporting entity should apply the provisions of Regulation No. 501/2002 Coll., for Banks and Other Financial Institutions, as amended as of 31 December 2017. This is because the amendment to the Regulation for Banks as of 1 January 2018 eliminates the previous provisions and refers to IFRS 9 Financial Instruments for the presentation of financial instruments, their measurement and disclosure. The maintenance of the current approach to securities, equity investments and derivatives will mean a significant simplification for insurance companies as they will not have to transition to IFRS 9 in the area of financial instruments.
The Regulation Amendment came into force on 1 January 2018 and it will apply for reporting periods beginning on or after 1 January 2018.
The full text of Regulation No. 502/2002 Coll. can be found here.
Following the Regulation Amendment, on 22 December 2017 the Financial Bulletin published changes to Czech Accounting Standards for reporting entities maintaining accounting records under Regulation No. 502/2002 Coll., effective from 1 January 2018. The full text of changes in Czech Accounting Standards for Insurance Companies can be found here.
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