IFRS 4 phase II

Zobrazit stránku: Česky

Even though IFRS 4 is an accounting standard, its ambition is to have a serious impact on the insurance business and management of insurance companies that are reporting in accordance with IFRS. It’s not only about a different form of presenting specific transactions, but it brings a completely new perspective on insurance services and it shows in detail the profitability of the insurance business.

An entirely new form of financial statement presentation related to a new insurance policy valuation model and related assets and liabilities will lead not only to change in incentive schemes for insurance companies management, but it will probably influence the development of new products, structure of distribution networks or IT environment in insurance companies. IFRS 4 implementation will require vast investments into infrastructure by most insurance companies.

New form of presenting financial statements will have to be interpreted by external subjects and insurance companies will find new competitors on financial market.

It is expect that a revised draft of IFRS 4 will be issued during the second quarter of 2013.


Radical changes are as follow

  • Change in valuation model of insurance-technical liabilities and reinsurance assets
  • New form of recording acquisition costs, how they are divided into incremental and non-incremental costs and the cancellation of existing accruals
  • Emphasis on regular reassessment of preconditions and yearly reporting of profit margins
  • Conception of insurance as a kind of loan, that should be repaid
  • Enhanced disclosure requirements

How can we help you?

  • Processing studies that analyze the impacts of implementing this IFRS 4
  • Assistance in the process of creating and setting models for calculating technical provisions
  • Assistance preparing adjusted management structures within the company following the requirement of IFRS 4
  • Training for employees related to expected modifications
  • Project management of the implementation process
  • Assistance in the creation of financial statements in accordance with the new standard
  • Seeking synergies with other relevant projects (i.e. Solvency II)