IASB to propose temporary measures for insurance companies

By Ken Tysiac

The International Accounting Standards Board (IASB) will propose temporary measures to address concerns about issues insurance companies are facing with implementation of the new financial instruments standard.

IFRS 9, Financial Instruments, was issued in July 2014 and takes effect on Jan. 1, 2018. The IASB confirmed Wednesday that it will propose amending IFRS 4, Insurance Contracts, to give companies whose business model is to predominantly issue insurance contracts an option to defer the effective date of IFRS 9 until 2021.

The board also will propose giving insurers that implement IFRS 9 the option—which would be called the “overlay approach”—to remove from profit or loss some of the accounting mismatches and temporary volatility that could occur before the new insurance contracts standard is implemented. The IASB is deliberating on the insurance contracts standard, which is expected to be issued next year.

Later this year, the IASB will publish an exposure draft seeking public comment on these measures. Companies that do not issue insurance contracts would not be affected by these measures.

Ken Tysiac (ktysiac@aicpa.org) is a JofA editorial director.

Where to find July’s flipbook issue

The Journal of Accountancy is now completely digital. 

 

 

 

SPONSORED REPORT

Better decision-making with data analytics

Data analytics has become a hot topic, but many organizations have not yet managed to understand its potential, let alone put it to work. This report will take a deep-dive on how to best introduce or enhance the use of data in decision-making.