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IFRS 17 Insurance Contracts Effective for annual periods Amendments to IAS 1- Classification of Effective for annual periods
beginning on or after Liabilities as Current or Non-current beginning on or after
IFRS 17 establishes the principles for the recognition, 1 January 2023 1 January 2023
measurement, presentation and disclosure of insurance The amendments to IAS 1 affect only the presentation Early application is permitted.
contracts and supersedes IFRS 4 Insurance Contracts. of liabilities as current or non-current in the statement
of financial position and not the amount or timing of
IFRS 17 outlines a general model, which is modified recognition of any asset, liability, income or expenses,
for insurance contracts with direct participation or the information disclosed about those items.
features, described as the variable fee approach.
The general model is simplified if certain criteria The amendments clarify that the classification of Definition of Accounting Estimates (Amendments to IAS 8)
are met by measuring the liability for remaining liabilities as current or non-current is based on rights
coverage using the premium allocation approach. that are in existence at the end of the reporting The amendments replace the definition of a change in
period, specify that classification is unaffected by accounting estimates with a definition of accounting
The general model uses current assumptions to estimate expectations about whether an entity will exercise estimates. Under the new definition, accounting estimates
the amount, timing and uncertainty of future cash flows its right to defer settlement of a liability, explain that are “monetary amounts in financial statements that are
and it explicitly measures the cost of that uncertainty. rights are in existence if covenants are complied with subject to measurement uncertainty”. Entities develop
It takes into account market interest rates and the at the end of the reporting period, and introduce a accounting estimates if accounting policies require items
impact of policyholders’ options and guarantees. definition of ‘settlement’ to make clear that settlement in financial statements to be measured in a way that
refers to the transfer to the counterparty of cash, involves measurement uncertainty. The amendments
In June 2020, the IASB issued Amendments to IFRS equity instruments, other assets or services. clarify that a change in accounting estimate that results
17 to address concerns and implementation challenges from new information or new developments is not the
that were identified after IFRS 17 was published. The Disclosure of Accounting Policies (Amendments correction of an error.
amendments defer the date of initial application of IFRS to IAS 1 and IFRS Practice Statement 2)
17 (incorporating the amendments) to annual reporting
periods beginning on or after 1 January 2023. At the The amendments require that an entity discloses its
same time, the IASB issued Extension of the Temporary material accounting policies, instead of its significant
Exemption from Applying IFRS 9 (Amendments to IFRS accounting policies. Further amendments explain how an
4) that extends the fixed expiry date of the temporary entity can identify a material accounting policy. Examples
exemption from applying IFRS 9 in IFRS 4 to annual of when an accounting policy is likely to be material
reporting periods beginning on or after 1 January 2023. are added. To support the amendment, the Board has
also developed guidance and examples to explain and
IFRS 17 must be applied retrospectively unless demonstrate the application of the ‘four-step materiality
impracticable, in which case the modified retrospective process’ described in IFRS Practice Statement 2.
approach or the fair value approach is applied.
For the purpose of the transition requirements, the date
of initial application is the start if the annual reporting
period in which the entity first applies the Standard,
and the transition date is the beginning of the period
immediately preceding the date of initial application.
T ABLE OF C ONTENT S
