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.
- 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.