On 30 July 2010, the International Accounting Standards Board (IASB) published its Exposure Draft of the new IFRS for insurance contracts. This is a major milestone in the creation of an improved reporting framework for insurance under International Financial Reporting Standards. In February 2012 the target publication date of the standard was further delayed, with an estimated publication date in the fourth quarter of this year. Preparation for the new IFRS will require significant investment and the detailed assessment of the new proposals will be a key step in what is expected to be a complex implementation challenge. It is hoped that the benefits of these efforts will bring more consistency and transparency to insurance reporting than there is under the current IFRS regime, which in turn should enhance insurers' ability to raise capital.
The Insurance Accounting Newsletter provides a regular update on the development of the new accounting requirements and a detailed analysis.
Issue 28
The last chance to influence the IASB on the new IFRS on insurance contracts – A closer look at the new proposals
This edition focuses on the five key areas of the 2013 ED where the IASB seeks feedback and describes the considerable business challenges which lie ahead for the insurance industry in relation to addressing these areas.
IASB published on 20 June its revised exposure draft ED/2013/7 on Insurance Contracts (the 2013 ED) which will remain open for comments until 25 October. This comment period may mark the final opportunity for the insurance industry to influence the new IFRS on Insurance Contracts expected to be released during the second half of 2014. Although the IASB has re-exposed the entire text of the draft IFRS, it only seeks targeted comments on five areas, thus most parts of the new IFRS should be treated as nearly final. The five areas are those where the IASB judged there was significant change from the original model presented in the 2010 ED.
On the other hand, the FASB has published on 27 June 2013 an exposure draft of a new US pronouncement for insurance contracts. This document presents the new accounting model for insurance contracts that has been developed jointly with the IASB. However, as commented in several past issues of our Insurance Accounting Newsletter, the proposal is not fully converged with the 2013 ED of the IASB and material differences remain. These are not covered in this issue of Deloitte's Insurance Accounting Newsletter. Finally, from a due process perspective, the US exposure draft is open for comments on the entire model given that FASB had only published a discussion paper in 2010.
Our Insurance Accounting Newsletter series summarises the debates as well as tentative decisions taken by the Boards, up to and including August 2013.
To find out more about these and other important developments, please download our Insurance Accounting Newsletter issue 28.
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