2019年-普华永道全球_Concerns_related_to_transition_and_scope_of_IFRS_17_PwC_8页_539kb

IFRS 17 Implementation Summary

Core Content

The International Accounting Standards Board (IASB) continues to evaluate and refine the implementation of IFRS 17, particularly concerning scope and transition issues. The discussions focus on providing clarity and flexibility for entities, especially those that may find the standard's requirements challenging or impractical.

Main Points and Key Information

Scope Exclusions and Transition Exceptions

• The IASB proposes an election to apply IFRS 9 instead of IFRS 17 for contracts where the only insurance risk is the settlement of some or all obligations (e.g., death waivers in loans).
• This election is to be made at the portfolio level, not the contract level, and is described as an election rather than an accounting policy choice to allow flexibility.
• The IASB retains the current scope definition of insurance contracts under IFRS 17, which is largely unchanged from IFRS 4, but introduces more restrictive unbundling requirements.
• The embedded insurance in credit cards is being evaluated separately and may be addressed in future discussions.

Transition Requirements

• The IASB retains the modified retrospective approach for transition, requiring entities to classify liabilities related to claims incurred before an insurance contract was acquired as liabilities for incurred claims.
• Retrospective application of the risk mitigation option under the variable fee approach is prohibited, due to the potential for hindsight and cherry picking.
• The Board agrees to retain the requirement to present comparative information for prior reporting periods, even though this may create an accounting mismatch with IFRS 9.

Risk Mitigation Option and Cumulative Amounts in OCI

• Entities using the risk mitigation option under the variable fee approach cannot apply it retrospectively.
• The cumulative amount in other comprehensive income (OCI) for insurance contracts is set to nil at transition if the entity lacks reasonable and supportable information for a retrospective approach.
• The cumulative amount in OCI for related assets is not adjusted, which may distort equity and future investment margin. However, the Board decided to retain the existing requirements.

Other Proposed Amendments

• The IASB has proposed several amendments to IFRS 17, including:
  • Clarification of terminology in IFRS 17 (June 2018).
  • Clarification of acquisition cash flows (June 2018 and January 2019).
  • Clarification of risk adjustment for non-financial risk (June 2018).
  • Clarification of the coverage period for contracts with direct participating features (June 2018).
  • Amortisation of contractual service margin for contracts with investment return service (January 2019).
  • Recognition of gain on reinsurance held when a loss on an onerous underlying contract is recognised (January 2019).
  • Separate presentation of portfolios of assets and liabilities (December 2018).
  • Clarification of sensitivity analysis disclosure (June 2018).
  • Deferment of the effective date of IFRS 17 to 1 January 2022 (November 2018).
  • Temporary exemption for IFRS 9 extended to 1 January 2022 (November 2018).
  • Consequential amendment to IFRS 3 for business combinations (June 2018).
  • Exclusion of business combinations under common control from IFRS 17 requirements (June 2018).
  • Update to illustrative Example 9 in IFRS 17 (June 2018).

Future Discussions

• The IASB will continue discussions on the remaining implementation challenges in the March 2019 meeting.
• The staff will bring a summary of all suggested amendments and assess the total package against the criteria agreed in October 2018.
• The IASB will consider the need for additional disclosures as a result of the proposed amendments.
• The exposure draft is expected to be issued by the end of the first half of 2019, followed by a public comment period and redeliberation of responses.

Next Steps

• The IASB will follow due process by issuing an exposure draft and allowing a public comment period.
• The expected timeframe for final amendments is 12 to 18 months.
• PwC has published several resources to support the understanding and implementation of IFRS 17, including:
  • In transition INT2019-01: IASB proposes to further amend IFRS 17.
  • In transition INT2018-07: IASB agrees to propose limited changes to balance sheet presentation.
  • In transition INT2018-06: IASB proposes to amend the effective date of IFRS 17 and extend the temporary exemption of IFRS 9.
  • In transition INT2018-05: IASB agrees on criteria for evaluating future amendments.
  • In transition INT2018-04: TRG debates more implementation issues.
  • In transition INT2018-03: Amendments to IFRS 17 on the IASB Board agenda.
  • In transition INT2018-02: Insurance TRG addresses unit of account, contract boundary, and coverage unit issues.
  • In transition INT2018-01: Insurance TRG holds its first meeting on IFRS 17.
  • In brief INT2017-05: IFRS 17 marks a new epoch for insurance contracts.
  • In depth INT2017-04: IFRS 17 marks a new epoch for insurance contract accounting.
  • Using Solvency II to implement IFRS 17.
  • IFRS 17 - Redefining insurance accounting.

Summary of Decisions on Six Key Issues

Conclusion

The IASB is working to address the practical implementation challenges of IFRS 17 while ensuring that any amendments are narrow in scope and do not delay the effective date. The focus remains on clarity, consistency, and comparability, with the Board acknowledging the need for further discussion and educational materials to support entities during the transition.