The International Accounting Standards Board (IASB) on July 28 proposed a limited change to the transition requirements in International Financial Reporting Standards (IFRS) 17, Insurance Contracts.
The change is intended to address accounting mismatches that can arise for insurers that are applying new standards in IFRS 17 and IFRS 19, Financial Instruments, for the first time in 2023. To address the issue, the proposed change would give insurers an option to present comparative information for certain financial assets consistent with IFRS 9. Comments on the proposed change will be accepted until September 27.
The European Financial Reporting Advisory Group (EFRAG) in an August 5 draft comment letter expresses its support for the proposed change but flags a remaining issue of concern for the IASB to address. Specifically, EFRAG recommends aligning the scopes of the classification overlay and the temporary exemption from applying IFRS 9 to prevent inconsistencies and unnecessary complexity. EFRAG is accepting comments on its draft comment letter until September 15.
The Australian Accounting Standards Board (AASB) also invites comments on its adoption of the proposed change. It specifically asks about regulatory issues in Australia that could affect implementation, any associated auditing challenges, and impacts on financial costs. Comments are due to AASB by August 20.
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