On or about 9 Dec 2021, the International Accounting Standards Board (IASB) has issued a narrow-scope amendment to the transition requirements in IFRS 17 Insurance Contracts, providing insurers with an option aimed at improving the usefulness of information to investors on initial application of the new Standard.
The amendment does not affect any other requirements in IFRS 17 and the transition requirements in IFRS 9.
IFRS 17 and IFRS 9 Financial Instruments have different transition requirements. When applying IFRS 17 and IFRS 9 for the first time, some insurers have found temporary accounting mismatches between financial assets and insurance contract liabilities in the comparative information.
The narrow-scope amendment in IFRS 17 will help insurers to avoid these temporary accounting mismatches and, will give them an option to improve the usefulness in presenting the comparative information for certain financial assets in a manner consistent with IFRS 9.
IFRS 17, including the amendment, will be effective for annual reporting periods starting on or after 1 January 2023.