IFRS Update – IFRS 17 Insurance Contracts

IFRS 17 is effective for annual periods beginning on or after 1 January 2021 with earlier application permitted as long as IFRS 9  and IFRS 15 are also applied.

Insurance contracts combine features of both a financial instrument and a service contract. In addition, many insurance contracts generate cash flows with substantial variability over a long period. To provide useful information about these features, IFRS 17:

• Combines current measurement of the future cash flows with the recognition of profit over the period that services are provided under the contract;
• Presents insurance service results (including presentation of insurance revenue) separately from insurance finance income or expenses; and
• Requires an entity to make an accounting policy choice of whether to recognize all insurance finance income or expenses in profit or loss or to recognise some of that income or expenses in other comprehensive income.

This course will focus on the requirements of the new standards IFRS 17.

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