The IASB has issued IFRS 17 ‘Insurance Contracts’, replacing the similarly titled IFRS 4 which was issued some time ago as an interim Standard.
IFRS 17 will help people to better understand insurers’ financial statements by requiring insurance contracts to be accounted for in a consistent manner. Implementation costs are likely to be substantial however and staff training, management education and communication with investors will be crucial for achieving the Standard’s objectives.
After twenty years of development the IASB has published IFRS 17 ‘Insurance Contracts’. The new Standard replaces IFRS 4 which was published in 2004. IFRS 4 was designed to be an interim Standard and therefore allowed entities issuing insurance contracts to carry on accounting for them using policies that had been developed under their previous local accounting standards. This meant that companies continued to use a multitude of different approaches for accounting for insurance contracts, making it difficult to compare and contrast the financial performance of otherwise similar companies.