IASB proposes amendments to IFRS 17
The IASB has issued for comment ED/2021/8 Initial Application of IFRS 17 and IFRS 9—Comparative Information (the ED).
The ED proposes a narrow-scope amendment to the transition provisions in IFRS 17 Insurance Contracts for entities that first apply IFRS 17 and IFRS 9 Financial Instruments at the same time.
The proposed amendment relates to financial assets for which comparative information presented on initial application of IFRS 17 and IFRS 9 has not been restated for IFRS 9. Applying the proposed amendment, an entity would be permitted (but not required) to present comparative information about such a financial asset as if the classification and measurement requirements of IFRS 9 had been applied to that financial asset.
The proposals address a concern raised by some insurers about the usefulness of the information that would be presented for financial assets in the comparative period on initial application of IFRS 17. The concern has arisen because the transition requirements in IFRS 17 and IFRS 9 apply at different dates, and IFRS 17 requires entities to restate comparative information but IFRS 9 does not. IFRS 9 allows (but does not require) entities to restate prior periods if, and only if, it is possible without the use of hindsight.
Entities that apply Appendices C and D of NZ IFRS 4 Insurance Contracts were not permitted to adopt Applying NZ IFRS 9 Financial Instruments with NZ IFRS 4 Insurance Contracts (Amendments to NZ IFRS 4), issued in November 2016 (paragraph NZ 46.1 of NZ IFRS 4). These amendments provided a temporary exemption from applying NZ IFRS 9 the entity met specified criteria. As a consequence, entities that apply Appendices C and D of NZ IFRS 4 were required to adopt NZ IFRS 9 for annual periods beginning on or after 1 January 2018.
Commenting on the Proposals
The NZASB encourages you to read the Exposure Draft and to comment on the proposals.
This ED has a short 60-day comment period. Please send your comments directly to the IASB (with a copy to the NZASB) by 27 September 2021.
Your comments can be made electronically to the IASB website by clicking on the following link https://www.ifrs.org/projects/open-for-comment/. First-time users must register with IASB to submit electronically.
Submissions closed on 27 September 2021