On 25 Jun 2020, the International Accounting Standards Board (IASB) issued 'Amendments to IFRS 17' to address concerns and implementation challenges that were identified after IFRS 17 'Insurance Contracts' had been published in 2017. The amendments are effective for annual periods beginning on or after 1 January 2023 with earlier application permitted.
The main changes resulting from amendments to IFRS 17 and IFRS 4 are:
- Deferral of the date of initial application of IFRS 17 by two years to annual periods beginning on or after 1 January 2023 and a change in the fixed expiry date for the temporary exemption in IFRS 4 Insurance Contracts from applying IFRS 9 Financial Instruments so that entities are required to apply IFRS 9 for annual periods beginning on or after 1 January 2023.
- Scope exclusion for credit card contracts and similar contracts and optional scope exclusion for loan contracts with insurance coverage limited to the loan amount
- Recognition of insurance acquisition cash flows relating to expected contract renewals, including guidance for insurance acquisition cash flows recognised in a business combination
- Application of IFRS 17 in interim financial statements
- Allocation of CSM attributable to investment-return service and investment related service
- Risk mitigation option using instruments other than derivatives
- Recovery of losses from underlying insurance contracts through reinsurance contracts held
- Presentation in the statement of financial position
- Transition issues: classification of contracts acquired in their settlement period and guidance on the restatement of the risk mitigation option applied in prior periods
- Minor application issues
The amendments are effective for annual periods beginning on or after 1 January 2023 with earlier application permitted. They are applied retrospectively in accordance with IAS 8.
You can find detail information about amendments to IFRS 17 and IFRS 4 in IFRS in Focus from June 2020.
Sources: www.iasplus.com, IFRS in Focus (June 2020)