The IASB concludes its technical discussions on the proposed amendments to IFRS 17

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In transition , PwC US Feb 26, 2020

Read PwC's observations from the February 25, 2020 IASB meeting where the IASB concludes its technical discussions on the proposed amendments to IFRS 17, retaining unchanged the annual cohort requirement in IFRS 17.

Overview

On 25 February 2020, the IASB (‘Board’) completed its deliberations responding to the feedback received on its proposals in the Exposure Draft, ‘Amendments to IFRS 17’ (‘ED’). The Board tentatively decided:

  • to confirm, with minor changes, its proposal that coverage units for insurance contracts without direct participation features should be identified considering the quantity of benefits and expected period of investment-return service, if any, in addition to insurance coverage;
  • to further amend IFRS 17 to:
    • extend the risk mitigation option for insurance contracts with direct participation features to include non-derivative financial instruments measured at fair value through profit or loss; and
    • provide further specific transition reliefs in the modified retrospective approach and the fair value approach; and
  • to finalise a number of minor amendments to IFRS 17, including one intended to resolve an inconsistency in the treatment of income tax receipts and payments included in fulfilment cash flows that had been identified by respondents to the ED. 

The Board tentatively decided that it would make no other amendments to IFRS 17. In particular, the Board tentatively decided that it would retain, unchanged, the annual cohort requirement in IFRS 17 and to finalise the editorial correction that would specify that, when assessing whether a contract meets the criteria for the scope of the variable fee approach (‘VFA’), an entity should assess the variability of the amounts to be paid to the policyholder over the duration of the insurance contract (rather than over the duration of the group of insurance contracts). 

The views in this In transition are based on our observations from the 25 February 2020 meeting, and they might differ in some respects from the official report of the meeting that will be published by the IASB in an IASB Update at a later date.

To have a deeper discussion, contact:

Donald Doran

Partner, National Professional Services Group, PwC US

Email

Marie Kling

Partner, National Professional Service Group, PwC US

Email

Mary Saslow

Managing Director, National Professional Service Group, PwC US

Email

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Matt Adams

Matt Adams

US Insurance Practice Leader, PwC US

David Schenck

David Schenck

US Insurance Tax Leader , PwC US

Richard de Haan

Richard de Haan

Global Actuarial Leader, PwC US

Mary Saslow

Mary Saslow

Managing Director, National Professional Service Group, PwC US

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