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15 December 2010

EFRAG commented on the IASBs ED Insurance Contracts


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EFRAG believes that the IASB has not sufficiently considered the interaction with IFRS 9, the question as to what constitutes the performance of an insurer and the presentation of performance in the financial statements of an insurer.


In July 2010, the IASB issued the Exposure Draft Insurance Contracts (the ED). The ED is part of phase II of the IASB’s project on accounting for insurance contracts.
 
The ED proposes a comprehensive measurement approach for all types of insurance contracts and also addresses recognition, presentation and disclosure.
 
EFRAG is pleased that in developing the proposals the IASB addressed a number of concerns expressed by EFRAG regarding the Discussion Paper on Insurance Contracts. EFRAG supports many of the proposals in the ED, including the proposals on measurement based on fulfilment cash flows and the building block approach.
 
However, EFRAG has concerns about certain aspects of the proposals in the ED. In particular, EFRAG believes the IASB has not sufficiently considered the interaction with IFRS 9, the questions what constitutes the performance of an insurer and the presentation of performance in the financial statements of an insurer.
 
EFRAG´s other concerns relate to the subsequent measurement of the residual margin, the summarised margin presentation in the face of the statement of comprehensive income and the transition requirements.

Press release


© EFRAG - European Financial Reporting Advisory Group


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