The International Accounting Standards Board (IASB) have released an article titled “What investors ask about IFRS 17” on 21 November 2017.
IFRS 17 Insurance Contracts was introduced to replace the requirements for accounting for insurance contracts in IFRS 4 starting from 1 January 2021. It introduces fundamental changes to the existing practices for some companies. Investors and analysts will need to make themselves familiar with the new standards as they will need to factor these changes into their analyses. In its effort to educate on the new standards, member of IASB and technical staff have met with investors and analysts around the world to explain how IFRS 17 information will differ from information now available, it also includes investors that do not specialise in the insurance sector.
Most investors and analysts welcomed the improvements in transparency and comparability introduced by IFRS 17. They believe that IFRS 17 will improve financial reporting for insurers, particularly in explaining the source of profits for long-term insurance contracts. Here are the top five questions from investors and analysts so far:
- Will IFRS 17 affect dividend payouts?
- How can a principle-based Standard like IFRS 17 improve comparability between insurers?
- Will IFRS 17 bring global comparability to the insurance sector?
- What are the main differences between IFRS 17, regulatory reporting and embedded value reporting?
- How will removing insurance premiums from the income statement improve comparability?
More details can be viewed from the IFRS website.
Source: IFRS, 21 November 2017