The new IFRS 17 standard for insurance contract accounting has been released following 20 years of discussion. It’ll be effective for annual periods beginning on or after 1 January 2021. The long lead time is a reflection of the challenges envisaged around implementation.
IFRS 17 is a complex standard that includes some fundamental differences to previous accounting standards with regards both liability measurement and profit recognition. Many large insurers began assessing its potential impact before its release, putting them ahead of the game when it comes to effective planning.
By taking a structured approach to IFRS 17 project planning, you’ll be better able to overcome challenges and maximise opportunities.
The IFRS 17 insurance accounting standard will be delayed by one year.
The announcement of a one-year delay in the implementation of IFRS 17 will be welcomed by many in the insurance community.
The additional time will help alleviate some risk from existing plans, however many companies still have a lot to do and cannot afford to press pause.
Transitioning to IFRS 17 will fundamentally change the balance sheet and future profit emergence for insurance companies - but how?
Where a fully retrospective calculation is impractical, there are choices that can involve a trade-off between the level of future profit, the impact on equity and operational considerations.