• Service: Audit, Financial Statement Audit, Financial Reporting & Accounting Standards, Accounting Advisory Services, International Financial Reporting Standards (IFRS)
  • Industry: Financial Services, Insurance
  • Type: Regulatory update
  • Date: 21/06/2013

Insurance: IFRS 4 Phase II – revised exposure draft 

Since publishing its first exposure draft in July 2010, the International Accounting Standards Board (IASB) has undertaken extensive outreach activities with a broad range of stakeholders. Industry concerns that the proposed measurement model would increase the volatility of reported results when compared with most current models have been a central theme for the IASB’s discussions.
Insurance: IFRS 4 Phase II – revised exposure draft cover
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The IASB has issued a revised exposure draft of its proposals for a new Insurance contracts financial reporting standard (IFRS 4 Phase II), with a 120 day comment period. This is a limited comment Exposure Draft and the IASB is seeking feedback on specific areas as outlined in this summary.


Key insights

  • Presentation of premiums in the statement of comprehensive income.
  • Requirement to use the residual margin to offset changes in estimates of cash flows for future coverage ('unlocking').
  • Requirement to present the effect of changes in the discount rate used to measure insurance contract liabilities in other comprehensive income (the 'OCI proposals').
  • Treatment of cash flows used to measure participating contracts (the 'mirroring' approach).
  • Proposed transition requirements.

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