- What is IFRS?
- International Financial Reporting Standards
- Goal of IFRS standards have been to become a global framework for how organizations should prepare and disclose their financial statements.
- There are two prevalent and parallel standards:
- IFRS 9 – focus on financial instruments
- IFRS 17 – focus on insurance contracts
- Note that IFRS 17 is not an upgrade of IFRS 9 – these are two different matters (just like two chapters in one book which aren’t sequel or prequel to each-other)
- What is IFRS 17?
- Indicates how insurance contracts and connected events should be accounted
- In one way it’s a successor of IFRS 4
- International Accounting Standards Board (IASB) publishes IFRS 17 in May 2017
- The standard is effective for accounting periods ending after January 1, 2022
- What is IFRS 9?
- Indicates how financial instruments should be classified and measured
- IFRS 17 Impact on Financial Statements:
- Insurance liability needs to be based on updated assumptions
- Data is needed with lower granularity and with more history
- Reporting time lines are shortened
- References:
- An introduction to IFRS 9 and IFRS 17 – https://ifrs17explained.com/2019/08/09/an-introduction-to-ifrs-9-and-ifrs-17/
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