IFRS 17 Insurance Contracts

The objective of IFRS 17 is to ensure that an entity provides relevant information that faithfully represents hose contracts. This information gives a basis for users of financial statements to assess the effect that insurance contracts have on the entity’s financial position, financial performance and cash flows. (IFRS 17.1)

Insurance contracts merge features of both a financial instrument and a service contract. Likewise, several insurance contracts produce cash flows with substantial variability over a long period. To deliver useful information about these features, IFRS 17:

  • combines current measurement of the future cash flows with the recognition of profit over the period that services are provided under the contract;
  • presents insurance service results (including presentation of insurance revenue) distinctly from insurance finance income or expenses; and
  • requires an entity to make an accounting policy choice of whether to recognize all insurance finance income or expenses in profit or loss or to recognize some of that income or expenses in other comprehensive income.
The overview, available translations and latest news, as published by the IASB, regarding this standard can be found here.