The IASB concluded that the proposals should be re-exposed with feedback being sought only on a limited range of questions.
In coming to the decision to re-expose, the IASB considered a number of factors including the length of time that has already been devoted to the project and the importance of issuing a final Standard in a timely fashion. However, the IASB decided on balance given the substantive nature of the changes made since the original Exposure Draft and the importance of understanding the operationality of its proposals re-exposure is warranted.
The targeted questions in the new Exposure Draft will relate to proposed requirements for:
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treatment of participating contracts
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presentation of premiums in the statement of comprehensive income
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treatment of the un-earned profit in an insurance contract
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presenting, in other comprehensive income, the effect of changes in the discount rate used to measure the insurance contract liability; and
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the approach to transition.
Hans Hoogervorst, chairman of the IASB, said:
"We are very aware of the difficulties faced by insurance companies and pension funds in the current low interest environment. As such we realise the importance of establishing a workable Standard based on current measurement as soon as possible. However, it is of equal importance that we get this Standard right.
In light of some changes made since the original Exposure Draft and the benefit that we believe can be gained from obtaining constituents’ input on these targeted areas, I believe that targeted re-exposure is the right decision. Limiting the questions in this way will enable us to avoid re-opening issues which have already been decided and sufficiently re-deliberated."
Press release
© IASB - International Accounting Standards Board
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